Hon Colin Barnett MEc MLA

Hon Colin Barnett MEc MLA

Former Premier; Minister for Tourism; Science

Hon Mike Nahan BEc MS PhD MLA

Hon Mike Nahan BEc MS PhD MLA

Former Treasurer; Minister for Energy; Citizenship and Multicultural Interests

    Our State Budget 2016-17: Securing our economic future - Household fees kept as low as possible

    12/05/2016 2:00 PM
     
    • Government proposes sale of Western Power
    • 2015-16 debt and deficit responds to fiscal action plan 

    The Liberal National Government has announced a modest increase in the representative basket of household fees and charges of 2.9 per cent, excluding the introduction of the $99 fee for Western Australia's expanded catastrophic injuries scheme, in today's 2016-17 State Budget.

     

    Treasurer Mike Nahan said the Government had been determined to keep rises in general household fees and charges as low as possible in a year when the new scheme was introduced.

     

    "Most people understand that the new insurance payment for catastrophic injuries suffered in motor vehicle accidents is something that is long overdue, however it doesn't make it any easier to pay, which is why we were determined to keep other rises to a minimum," Dr Nahan said.

     

    In 2016-17, electricity charges for the average householder will rise by three per cent and water charges by 4.5 per cent, but there will be no increases in stamp duties or standard driver's licences.

     

    Standard motor vehicle licences will go up by 2.5 per cent, as will standard third party insurance costs.  A standard two-zone public transport fare will go up by 2.1 per cent, while student fares on public transport will remain at 2015-16 levels and the concession fares remain at 40 per cent of standard fares.

     

    "We have again taken a massive hit on our revenues, losing another $2.5 billion on projected earnings to 2018-19 since the Mid-year Review and notwithstanding the Australian Government's agreement to provide a $490 million GST top-up," the Treasurer said.

     

    "So despite the revenue pressures on the State Budget, and extra effort to further reduce expenses, the Government has decided to further absorb the losses in order to protect Western Australian families." 

     

    Dr Nahan said the Government now predicted the budget deficit for 2015-16 would be $2 billion, a reduction of more than $1 billion from the Mid-year Review forecast, reflecting GST 'top up' funding from the Australian Government, a higher than expected iron ore price, and $235 million less in recurrent spending.  In this regard, expense growth in 2015-16 had been held to 2.5 per cent.

     

    The forecast 2016-17 State Budget deficit is $3.9 billion with expenses growth forecast at 3.7 per cent, however the Treasurer said that he expected both figures to reduce with the continued impact of the Government's fiscal action plan.

     

    He pointed out that at the Mid-year Review, the WA Treasury had forecast net debt at June 30, 2016 to be $29.6 billion, however the figure is now estimated at $27.9 billion mainly due to the lower than expected operating deficit in 2015-16.  Net debt of $33.8 billion is forecast for June 30, 2017.

     

    Dr Nahan said the Government had now introduced savings measures totalling $25.4 billion since it was first elected in 2008 and had again taken a cautious approach to spending, with expenses revised down by $745 million from 2015-16 to 2018-19 since the December Mid-year Review.

     

    This would be achieved through the Government's wages policy, agency expenditure reviews and other measures offsetting new spending initiatives.

     

    The Government has kept its election commitment to raise the tax-free threshold for payroll tax from $800,000 to $850,000 and as a consequence, more than 11,000 businesses will receive tax relief totalling $65 million over the next four years.

     

    Premier Colin Barnett said the measure was good news for small business.

     

    "The Government has introduced a range of measures to broaden the economy in agriculture, tourism, mining and petroleum, aquaculture and innovation," Mr Barnett said.

     

    "At the same time, we have worked assiduously to bring down Government expenses from their peak in 2008-09 of 13.5 per cent growth to an estimated 2.5 per cent in 2015-16 and 3.7 per cent in 2016-17.  We achieved a 30-year low in expense growth in 2014-15 of just 2.2 per cent.

     

    "That is a major achievement, especially as we have done it without impacting frontline services.  The payroll tax initiative, the clampdown on Government expenses and the targeted spending measures to broaden the economy, is very good for business and jobs."

     

    The Treasurer also announced in the Budget Speech that the State Government proposed to sell WA's major power transmission business Western Power after the next State election.

     

    Dr Nahan, who is also the Minister for Energy, said the divestment of Western Power, most likely through a long-term lease, combined with the current asset sales program, would result in estimated proceeds of about $16 billion.

     

    These proceeds will reduce debt and create a $5 billion fund for public infrastructure.

     

    The Treasurer said a final decision to sell Western Power would be taken after the next election, due in March 2017, and not before a detailed due diligence process and the establishment of an effective regulatory regime to ensure electricity consumers were no worse off after a sale.

     

    Fact File

    Securing Our Economic Future

    • Extra $50 million for Seizing the Opportunity Agriculture initiative
    • Additional $47 million over four years for tourism events, conferences and destination marketing
    • Extra $20 million over four years for an innovation package to strengthen, broaden and build the WA economy
    • $16 million over four years to establish a Western Australian Regional Film Fund
    • Payroll tax-free threshold increases from $800,000 to $850,000 from July 1, 2016, benefiting more than 11,000 businesses

    Meeting Demand While Efficiently Delivering Quality Services

    • $266 million (4.8%)  increase in 2016-17 for public hospital services
    • $81 million increase in education expenditure in 2016-17, providing a 3.3% increase in spending by schools
    • $67 million (5.1%) increase in spending on policing in 2016-17 to fulfil commitment to recruit 550 additional officers by end of 2016-17
    • Additional $14.9 million over two years for methamphetamine strategy, plus $19.2 million for North West Drug and Alcohol Support Program
    • New public sector wages policy caps increases in wages and conditions at 1.5%
    • Extension of Agency Expenditure Reviews to 54 agencies

    Supporting and Protecting Our Community

    • $147 million from 2015-16 to 2019-20 to meet growth in the prisoner population
    • Additional $26 million in 2016-17 to extend and expand National Disability Insurance Scheme (NDIS) trials
    • Extra $50 million to 2019-20 to meet demand in 2016-17 for disability services outside of the NDIS
    • $13.1 million to continue the Mental Health Court Diversion Program
    • $10 million for Lathlain Park Precinct Redevelopment
    • Extra $8.7 million over three years for Community Sporting and Recreation Facilities Fund
    • $5 million over four years for shark hazard mitigation initiatives and $600,000 in 2016-17 for beach enclosures

    Investing in Infrastructure to Support Our Growing State

    • $7.7 billion over next four years on transport infrastructure (34% of total infrastructure investment), including:
      • $1.9 billion Forrestfield-Airport Link, scheduled to begin operations in 2020
      • $1.5 billion towards Roe 8 and Fremantle Tunnel, due for completion in 2021-22
      • $427 million for the $1.9 billion MAX Light Rail project
      • $145 million for dual carriageway on Armadale Road
      • $49 million for Ellenbrook Bus Rapid Transit project
    • $1 billion over the forward estimates on school infrastructure, including:
      • new North Butler senior high school ($67 million)
      • Expansions at Shenton College ($50 million) and Cape Naturaliste College ($32 million)
      • Continuing redevelopment of Carnarvon Community College ($18 million)
    • $378.5 million over next four years for construction of the $428 million New Museum
    • $1.2 billion Perth Children's Hospital due to open in late 2016 

    Premier's office - 6552 5000

    Treasurer's office - 6552 5700