Hon Christian Porter BA(Hons) BEc LLB(UWA) MSc(Dist)(LSE) MLA

Hon Christian Porter BA(Hons) BEc LLB(UWA) MSc(Dist)(LSE) MLA

Former Treasurer; Attorney General

    GST slash calls for strong decisions

    17/04/2012 12:00 AM
     
    • Two per cent savings initiatives to be implemented across Government

    Government agencies and Government Trading Enterprises (GTEs) will be required to identify waste and ensure more efficient spending under new savings initiatives announced today by the State Government.

     

    Treasurer Christian Porter said the initiatives would not impact on frontline service delivery outcomes and would form part of the 2012-13 State Budget.

     

    “These initiatives are a necessary response to the Federal Labor Government’s decision to reduce Western Australia’s population share of the GST to 55 per cent in 2012-13,” Mr Porter said.

     

    “Our State is now suffering an unprecedented reduction in funding at the hands of the Federal Labor Government with confirmation last week that WA’s share of GST grants would be slashed from the already low 72 per cent to just 55 per cent in 2012-13. 

     

    “Compared to our full population share of the GST, a 55 per cent share will cost WA about $2.4billion in 2012-13 and current predictions indicate a loss of about $16billion over the five years to 2015-16.

     

    “Prime Minister Julia Gillard has effectively taken more than $800million of WA taxpayer’s money out of the State Budget overnight. To ensure the State finances remain in surplus, the Liberal National Government has had to make the strong decisions and commit to finding savings inside the State Budget.”

     

    The Treasurer said the savings initiatives would include:

    • an efficiency dividend to identify waste and savings to be applied to public sector agencies from 2012-13, starting at two per cent for all departments (one per cent for education), with additional one per cent dividends to be achieved in each of the three financial years to 2015-16. These efficiencies will be achieved without impacting on frontline service delivery outcomes
    • a further efficiency dividend for GTEs to be measured as a percentage of the discretionary spending, starting at 2.5 per cent in 2012-13 with an additional 1.5 per cent in 2013-14, 1.5 per cent in 2014-15 and 0.5 per cent in 2015-16. This builds on the existing five per cent efficiency dividend applied to these entities in 2011-12 which has already achieved confirmed savings of $524million
    • a two-year freeze on the growth in the number of public sector workers to further control public sector salaries expenses - except frontline services in police, education and health. This measure will require all departments to operate for the next two financial years inside their FTE cap as it was set in 2011-12.  These savings will not impact on frontline service delivery outcomes
    • formal policy of limiting general government sector FTE growth to 1.5 per cent per year in 2014-15 and 2015-16
    • deferral of spending on a range of capital works projects across a number of agencies.

    “These initiatives are designed to guarantee the WA taxpayers that public departments are operating efficiently with as little waste as possible,” Mr Porter said.

     

    “The Liberal-National Government has a solid record of cutting waste and delivering more efficiency across the public sector and this initiative further reflects our commitment to do the hard work to keep the State finances in surplus.”

     

    The new savings initiatives build on the highly successful measures to achieve efficiencies in the public sector that have already been introduced by the Liberal-National Government since 2008, including: 

    • a three per cent efficiency dividend on the general Government sector starting in 2009-10, which saved $1.46billion over four years
    • the first five per cent efficiency dividend on GTEs discretionary spending in 2011-12, saving $524million over four years to 2015
    • the targeted savings initiatives built into the 2011-12 Budget, saving $300million
    • recommendations from stage one of the economic audit conducted shortly after the 2008 election and implemented in the 2009-10 Budget, saving $979.6million (including targeted reductions in grants spending saving $145.4million over four years and a reduction in agency procurement costs of $239.2million over four years)
    • voluntary severance programs, saving $216million between 2012-13 and 2015-16
    • $3billion saved through the Capital Works Audit at the time of the Global Financial Crisis.

          Fact File

    • WA receives the lowest share of GST grants, while Victoria is next lowest at 92 per cent in 2012-13, and NSW and Queensland also slightly below 100 per cent.  Other States and Territories get well over 100 per cent
    • WA will receive just $1,219 a head of population next financial year, compared with nearly $2,177 in Queensland and more than $12,223 in Northern Territory
    • In 2012-13, the Northern Territory will receive basically the same GST grant as WA, despite having only one per cent of the population compared to WA's 10.4 per cent and despite not having anywhere near the infrastructure requirements of WA

    Treasurer’s office - 6552 5600