- Economic and fiscal overview indicates $1.2 billion downward revision to revenue from pre-election estimates
- Net debt now forecast to reach $42.3 billion by June 30, 2020
- Government requests Federal Treasurer for a $226 million GST 'top-up' grant
Treasurer Ben Wyatt and Under Treasurer Michael Barnes today provided an overview of the economic and fiscal outlook for Western Australia and reinforced the need for urgent Budget repair.
The overview reveals that in two months, general government revenue has been revised down by $1.2 billion since pre-election forecasts, which is primarily a result of the lower than expected GST relativity ($735 million); a further $199 million revision to forecast GST grants for the impact of lower population growth in WA; and the impact of declining land valuations on forecast land tax and Metropolitan Region Improvement Tax collections ($239 million).
Despite early and tentative signs the State's economy could be stabilising, the deficit in 2019-20 was now forecast to reach $1.1 billion, compared to the $535 million pre-election forecast.
Key challenges for the State include higher net debt levels, now forecast to reach $42.3 billion by June 30, 2020, a record high underemployment rate and unprecedented low wage and population growth.
The 2017-18 Budget is scheduled for September 7, 2017 to allow the State Government to fully consider Budget repair measures.
The Treasurer has also written to the Federal Treasurer requesting a $226 million GST top-up grant to effectively maintain Western Australia's GST relativity at the 0.376 level that applied in 2014-15, consistent with arrangements over the past two years.
A copy of the Economic and Fiscal Outlook presentation is available at http://www.treasury.wa.gov.au
Comments attributed to Treasurer Ben Wyatt:
"This overview is about being transparent with our financial position to allow all Western Australians to understand the challenges we face.
"Western Australia's finances are not in good shape due to years of budget mismanagement from the previous government.
"Years of poor financial management has left the State Government vulnerable to this sort of deterioration.
"The diabolical state of the books, coupled with further deterioration in revenue, have further exacerbated the significant fiscal challenges we now face.
"Returning the budget to surplus is going to be difficult, however we are taking immediate action to limit unnecessary expenditure.
"The McGowan Labor Government is committed to progressing the Service Priority Review, a budget management initiative, which has been designed to deliver significant savings to the budget and assist in getting it back on a sustainable footing in the long term.
"The scale of the challenge confronting the Government means the 2017-18 State Budget will be later than usual this year, with Cabinet approving a September 7 Budget."
Treasurer's office - 6552 5900