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Mid-Year Review shows WA's economy going from strength to strength
28/12/2000 6:45 AM
Western Australia has its lowest levels of net debt since records commenced more than a decade ago, Premier Richard Court said today.
Releasing the 2000-01 Mid-Year Review, Mr Court said WA’s finances were expected to be in an even stronger position by the end of this financial year than was predicted in the State Budget in May.
He said the overall position of the State’s finances could be described as healthy.
WA’s total public sector net debt was now forecast to be $4.5 billion by June 30, 2001 - $1.5 billion less than estimated in the Budget seven months ago.
Mr Court said the Coalition Government had nearly halved net debt since coming to office in 1993, when it stood at $8.5 billion under the previous Labor Government.
“This significant reduction in debt has helped to free up more than $450 million in net interest costs, which is money that we’ve channelled into important facilities and services for the community, particularly into health and education,” he said.
“With the State’s finances in order, we’ve been able to commit record levels of funding into those areas considered important by the community; without responsible financial management, that’s just not possible.”
Mr Court said WA was also now expected to record a higher surplus this financial year than predicted at Budget time.
On an accrual basis, the general Government sector operating surplus is projected to be $106 million, $64 million higher than predicted in the Budget.
The accrual presentation is the format accepted by all Australian Governments and the Australian Bureau of Statistics for reporting public finances.
“These are good results for the people of WA and they follow confirmation of WA’s AAA credit rating by Standard & Poors earlier this month,” Mr Court said.
“Responsible financial management over the last eight years has been important to WA having the strongest performing economy in Australia, and with these healthy foundations, our economy will continue to go from strength to strength.”
Mr Court said the Mid-Year Review took into account the sales of AlintaGas and Westrail Freight, and commitments made since the State Budget in May to further invest in essential areas, particularly health and education.
The review also includes the Government’s decisions to proceed with construction of the rail link south to Rockingham and Mandurah and north to Clarkson, and the Perth Convention and Exhibition Centre.
The Mid-Year Review for 2000-01 also shows:
the economic growth forecast remains on track at four per cent and is projected to strengthen to five per cent in 2001-02;
the unemployment rate is expected to improve to an average 6.25 per cent, compared with the 6.5 per cent forecast at budget time;
general Government sector revenue is projected to rise $390 million due in part to stamp duty revenues from the sales of AlintaGas and Westrail Freight and petroleum royalties; and -
general Government sector operating expenses are forecast to increase $326 million due largely to increases in the health and transport portfolios.
Mr Court said the Government continued to operate a cash surplus on its day-to-day recurrent costs. However, the record capital works program means that the general government sector will continue to run a cash deficit in 2000-01 of approximately $399 million.
He said the forward estimates in the Mid-Year Review reflected the strong demands for essential public services due to the higher population and economic growth that the State enjoys.
“This means there will need to be a continuation of careful financial management across the forward years to ensure the State’s finances remain well balanced,” he said.
In this regard, Mr Court said the forward estimates of revenue were conservative and pointed out that the Government was expecting oil prices to decline from around $US27-28 per barrel for the remainder of 2000-01, to around $US19-20 per barrel by 2003-04.
The table below summarises Western Australia’s financial position for 2000-01 as detailed in the Mid-Year Review.
State Budget Estimate
Accrual operating result General Government
Net Debt – Total Public Sector
Justine Whittome 9222 9475