WA State 2015-16 Budget in Deficit
Western Australia has fallen into deficit for the first time in 15 years. In the State Budget handed down on May 14th, the State Government announced a $1.3 billion deficit for the current financial year, and revealed a $2.7 billion deficit in 2015-16, with a return to a surplus of $874 million in 2017.
Treasurer Mike Nahan called the 2015-16 budget a “budget for tough times” and pointed to the plunging iron ore price and WA losing its share of GST for the state’s soaring debt. To balance the books after the record deficit, Dr Nahan said that by selling off several assets, he hoped to inject between $3 billion to $5 billion into the state’s finances by the time the next budget was handed down.
Key assets to be sold include the TAB, Fremantle Port, Forest Production Commission software plantations, 11,000 cars from the state fleet, select government office buildings, specific Landcorp land holdings, assets of Horizon Power and Synergy and non-core assets of Western Power.
WA Premier Colin Barnett said the Government faced an extraordinary situation. Selling state assets would help build the state’s infrastructure without adding to debt. “The decision to pursue a sensible program of further program asset sales will enable the government to build new infrastructure to support future growth, without putting further pressure on the state finances,” Mr Barnett said.
Dr Nahan said the government had responded to the “perfect economic storm”. He expected the GST to “come roaring back” in the next few years, with WA expecting to pocket $1.9 billion in the next financial year. Commodity prices have plummeted, our share of GST revenue has been driven to record lows and softening economic conditions have directly reduced all other major sources of state tax revenue.”
Families will see utility prices rise, with electricity prices and water cost both increasing 4.5 per cent a year. Motorists will also pay $99 a year for no injury insurance to help expand the government’s Compulsory Third Party scheme. The $3000 first homebuyers grant for people who want to purchase existing homes has been cut, while the $10,000 grant for the purchase of new homes remains.
The government will continue to invest in capital work projects, budgeting $24.1 billion over the next four years, including $6.3 billion in 2015-16, with $295 million on education infrastructure, including four new primary schools and two new high schools. In addition, $15.1 billion will be spent on WA roads by 2019, and $1.2 billion on 300 new rail cars by 2019.
Mr Barnett said transport was a key focus of the budget. “We are investing in the future to grow the state for the future, while providing thousands of jobs,” he said. Health will get an injection of $8.1 billion, with $50 million allocated to Aboriginal health and $28 million for health facilities in Bunbury and Karratha. $1 billion is budgeted for Royalty for Regions for the next four years, with the Pilbara region allocated $757 million, and the Gascoyne region $31 million.
For more information, visit http://www.ourstatebudget.wa.gov.au