- The State's finances have improved by a total of $568 million over the forward estimates since the Budget was handed down in September
- The general government operating deficit for 2017-18 has been revised to $2.6 billion
- The small increase in the deficit in 2017-18 relative to the Budget reflects changes in the revenue outlook, including timing changes for Commonwealth grants
- Total public sector net debt is projected to be $42.8 billion by June 30, 2021, $854 million lower than at Budget-time
- General government expenditure in 2017-18 is unchanged since the Budget
- Employment growth in the Western Australian economy has been revised up to 2 per cent in 2017-18, with full-time employment up by 10,554 people during November
Today's release of the Government Mid year Financial Projections Statement (or Mid year Review), reflects the McGowan Government's ongoing focus to repair the State's finances.
With responsible financial management, Western Australia remains on track to return to a Budget surplus in 2020-21.
Consistent with expectations in the 2017-18 State Budget, the operating outlook is expected to improve over the forward estimates, with declining deficits in 2018 19 and 2019 20 before a return to an operating surplus of $926 million in 2020 21.
The general government operating deficit for 2017 18 is now forecast to be $2.6 billion. This $265 million increase reflects lower than expected taxation revenue, a delay in Commonwealth grant revenue for road projects, and lower royalty income - including the disallowance of the gold royalty Budget repair measure by the Liberals and Nationals.
The Mid-year Review reflects the McGowan's Government's focus on implementing Budget repair measures and containing expenditure growth. Across the forward estimates period, general government expenditure is projected to increase by an average of just 2.2 per cent per annum (well below the average 6.7 per cent for the decade to 2016 17), with expenses in 2017-18 unchanged since the Budget at $30.8 billion.
Total public sector net debt is now forecast to be $42.8 billion by June 30, 2021, down $854 million since the Budget. This largely reflects the flow on impact of a lower net debt outcome at June 30, 2017 ($536 million) and the impact of the sale of Westralia Square by the Insurance Commission of Western Australia ($298 million).
The Western Australian economy continues to show signs of recovery, with the labour market being stronger than expected since the Budget, coinciding with a lift in business confidence and advertised job vacancies. The unemployment rate has been lowered to 5.75 per cent from six per cent (2017-18 Budget).
Comments attributed to Treasurer Ben Wyatt:
"This Mid-year Review highlights the Government's commitment to responsible financial management.
"There is still a lot of hard work to be done, but we are heading in the right direction despite the challenges thrown at us by the Liberals and Nationals in blocking a key budget repair measure and shielding profitable gold miners from paying their fair share.
"Not surprisingly given the Budget was only presented in September, the issues addressed in this Mid year Review are mainly around the timing of Commonwealth funding, particularly for transport projects, and unavoidable costs such as addressing acute prison population pressures.
"I am pleased to confirm that the Government has maintained the low expense growth trajectory laid down in the recent Budget.
"Where spending increases have been required, we have sought to reprioritise other outlays and the projections are in line with a lower forecast net debt outcome by June 30, 2021 compared with the Budget.
"It is important that the Government continues to address the debt and deficit legacy of the former Liberal National Government."
Treasurer's office - 6552 5900