Eric Ripper

Eric Ripper

Deputy Premier; Treasurer; Minister for State Development

    State Budget 2008-09: Building Western Australia - Financial Responsibility

    8/05/2008 12:00 AM
     

    A thriving economy underpinned by prudent financial management had produced another strong Budget result that would help secure Western Australia’s long-term future, Treasurer Eric Ripper said today.

     

    Mr Ripper said the Government was helping to sustain unprecedented economic growth and low unemployment by reinvesting the State’s surpluses into key infrastructure.

     

    “This is our eighth consecutive balanced Budget with a forecast surplus of $1.86billion,” he said.

     

    “Economic growth is predicted to be above six per cent for the third year in a row.”

     

    The Treasurer said the Budget surplus was effectively the State’s savings account and compared it with money that might be left over in a family household account at the end of the year after all the bills were paid.

     

    “Householders may choose to use that money to extend the house or take a family holiday or they may put it back into their mortgage,” he said.

     

    “In just the same way, the State Government uses that money to help pay for the hospitals, schools, roads, ports and electricity networks we need and therefore reduce the amount we have to borrow to deliver such crucial infrastructure.”

     

    Mr Ripper said the Government had consistently generated Budget surpluses and contained debt, ensuring the State maintained its AAA credit rating.

     

    “WA’s surpluses have fully paid for the $1.66billion New MetroRail project,” he said.

     

    “Last year we set aside $1.09billion towards the new Fiona Stanley Hospital and in this Budget a further $221million has been allocated to that project.

     

    “The Government’s track record of responsible financial management has given us the capacity to invest a record $7.6billion in building our State’s infrastructure in 2008-09 - and a massive $26.1billion over the next four years.”

     

    However, the Treasurer said that, while the State’s unprecedented economic growth provided opportunities, it also created challenges.

     

    “It is vital to allocate our current Budget surpluses to these large infrastructure projects because Budget surpluses are predicted to decline over the coming years,” he said.

     

    Mr Ripper said the State could expect surpluses to drop from nearly $2billion in the 2008-09 Budget to around $200million by 2011-12, largely due to the State’s declining share of GST revenue, which was predicted to drop to 6.2 per cent by 2011-12.

     

    “Additional challenges for the State come from growing demands for services and infrastructure and an increasing public sector wages bill,” Mr Ripper said.

     

    “We need to pay our nurses, teachers and police officers competitive wages to attract and retain the right people and this budget responds to these pressures.”

     

    Relative to last year, the 2008-09 Budget included an extra $2.1billion over four years for wages settlements and offers.

     

    The Treasurer said the Government would continue to manage its finances prudently to ensure the AAA credit rating was protected.

     

    “We recognise that many families are under financial pressure from higher interest rates and higher fuel and food costs,” he said.

     

    “We are also delivering tax relief for the fifth year in a row, with a $1.2billion package that provides land tax and stamp duty relief and payroll tax reform.

     

    “We are making housing more affordable by slashing 15 per cent from stamp duty on the median‑priced home, saving the homebuyer nearly $3,000.

     

    “We have also abolished mortgage duty and continue to have the most generous first homebuyer stamp duty exemptions in the nation.”

     

    Mr Ripper said the Government’s tax reform process meant the Government had now abolished 11 State taxes, including mortgage duty set to disappear on July 1.

     

    Other details of the tax relief package included:

    ·         a $50,000 increase in the land tax exemption threshold to $300,000 (a doubling of this threshold in the last 12 months),

    ·         increases in the other thresholds of the land tax scale and reducing the lowest two land tax rates by 33 per cent,

    ·         a reduction in Metropolitan Region Improvement Tax from 0.18 per cent to 0.15 per cent, and

    ·         bringing forward by six months the $5,000 increase in the general motor vehicle stamp duty thresholds announced in last year’s Budget to July 1 2008. Saving $225.00 on a $30,000 vehicle.

     

    Mr Ripper said household fees and charges, already announced by the Government, had also again been kept to 2.4 per cent - well below the 3.4 per cent reference rate of inflation for the eighth year in a row.

     

    “The 2008-09 State Budget delivers the services and infrastructure the community needs while maintaining this Government’s commitment to responsible financial management,” he said.

     

    Treasurer's office -9222 8788