THE McGowan Labor Government has delivered WA’s first operating surplus in five years.
The 2019-20 State Budget, handed down today, revealed an operating surplus of $553 million in 2018-19, forecast to rise to $1.5 billion next financial year.
This represents a $3 billion turnaround from the $2.5 billion deficit in 2016-17, the final year of the Liberal National Government.
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READ NOWThe forward estimates anticipate a surplus over $2 billion in 2022-23.
HOW THE BUDGET WILL AFFECT YOUR HIP POCKET
A return to an operating surplus position was a key requirement of the Government’s debt reduction strategy.
The State’s net debt levels are forecast to peak at $37 billion next year, $4.1 billion lower than projected under the previous Government.
Households will be subject to the lowest increases to fees and charges in 13 years, with the Budget committing $284 million to limit household electricity price increases.
“With disciplined management of expenditure, the McGowan Labor Government has delivered on its pledge to return the Budget to surplus – after just two years in office,” Treasurer Ben Wyatt said.
“The Budget vindicates the Government’s approach to expenditure restraint so much so, that even without the GST floor top-up payments, the McGowan Government would still achieve operating surpluses across the entire forward estimates.
“This Budget proves that it is possible to deliver relief to households, prioritise spending to improve key services, and build job-creating infrastructure while maintaining responsible financial management.”
Premier Mark McGowan said West Australians had helped carry the burden of budget repair but the benefits were now here to see.
He proclaimed the budget as proof his government’s plan was working.
“Western Australia is back on track,” he declared.
“It is the leadership and financial discipline that this state was crying out for.”
Surpluses are projected to rise through the outyears, but Mr Wyatt said that was not based on the assumption current high iron ore prices, currently sitting at about US$94 per tonne and caused by the Vale tailings dam disaster, would continue in the long-term.
He believes it’s prudent Treasury assumptions for the state’s most important commodity are conservative, dropping to $US73.50/t in 2019/20 and lower beyond that.
WA’s eye-watering debt is actually forecast to rise next financial year as billions are spent on infrastructure, particularly roads and rail, but steadily decline afterwards.
Mr McGowan said WA was the only state in the nation paying down debt, which was saving hundreds of millions of dollars in interest payments.
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