26/11/2008 - 14:07

WA's budget surplus falls 70%

26/11/2008 - 14:07

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Treasurer Troy Buswell has indicated an end to Western Australia's revenue boom, while releasing budget data showing a sharp fall in the state's surplus.

WA's budget surplus falls 70%

Treasurer Troy Buswell has indicated an end to Western Australia's revenue boom, while releasing budget data showing a sharp fall in the state's surplus.

Mr Buswell today released the state government's quarterly budget results for the three months to the end of September, saying WA needed to clamp down on spending and the government needed to become more efficient.

The state's surplus plummeted to $220 million, down 70 per cent from the $734 million recorded in last year's September quarter.

Revenue fell 1.9 per cent or $91 million to $4.6 billion, partly attributable to the delayed issue of land tax and Metropolitan Region Improvement Tax assessments. Royalty income from mining was up $142 million, due primarily to higher iron ore prices.

"This is very low growth, nevertheless, and most probably signals the end of the recent boom in State revenue," Mr Buswell said.

In contrast, government expenses were up 10.7 per cent or $423 million to $4.4 billion, driven higher in part by higher salaries which rose $215 million for the quarter thanks to higher employee numbers and pay rates in the health, education and public sectors.

"The results for the quarter highlight the need for measures to restrain expenditure growth, particularly given the emerging impact of the change in global financial conditions on the WA economy," Mr Buswell said.

"These outcomes show precisely why the Liberal-National Government has to see through the three per cent efficiency dividend requirement, to be reflected in agency budgets in the coming mid year review."

 

Troy Buswell's statement is below:


Treasurer Troy Buswell said the September 'Quarterly Financial Results' for State Government finances reinforced the need to clamp down on spending and make the Government more efficient.

Releasing the figures today, Mr Buswell said the results indicated a diminishing surplus position and the gap between expenditure and income narrowing rapidly.

"This is the legacy Labor has left Western Australia - profligate, out of control spending, with no attempt ever being made to position finances for a time in the future when income would invariably turn down," he said.

The surplus of $220million recorded for the three months ended September 30 is substantially lower than the $734million outcome for the same period last year.

Expenses, on the other hand, were a massive 10.7 per cent higher in the first quarter of 2008 09 compared with the September quarter a year earlier. Higher public sector salaries and employee costs were a significant portion of the increase, growing at 13.6 per cent.

"The results for the quarter highlight the need for measures to restrain expenditure growth, particularly given the emerging impact of the change in global financial conditions on the WA economy," the Treasurer said.

"While these are outcomes for only three months of the current financial year, they emphasise once again the need for strong measures to keep spending in check to ensure the State's finances remain sustainable going forward."

Revenue for the three months was $91million (or 1.9 per cent) lower than the same period in 2007. This can be partly attributed to the later issue of land tax and Metropolitan Region Improvement Tax assessments in 2008-09.

"This is very low growth, nevertheless, and most probably signals the end of the recent boom in State revenue," Mr Buswell said.

Transfer duty, in particular, was $187million lower due to ongoing weakness in the property market.

The report highlights continued high levels of spending in the State's Capital Works Program, with total public sector outlays on infrastructure up by $157million.

"These outcomes show precisely why the Liberal-National Government has to see through the three per cent efficiency dividend requirement, to be reflected in agency budgets in the coming mid year review," the Treasurer said.

"We are also looking to the new Economic Audit committee to help identify waste and inefficiencies.

"The committee was an election commitment and met for the first time last week.

"I believe there is considerable scope for improvements and savings if we are prepared to look hard enough, without having to compromise the delivery of essential services."

The September 2008 report is available from the Department of Treasury and Finance website at http://www.dtf.wa.gov.au/.

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