WESTERN Australia’s government is maintaining a tight hold on the purse strings, insisting its contentious public service wages policy will continue in the lead-up to the next election despite forecasting a strong budget surplus.
The state’s mid-year economic review released on Wednesday projected a $2.6 billion surplus for 2019/20, up from $1.5 billion in the budget forecast in May.
Net debt for the year to June 30 was expected to peak at $39.5 billion but is now tipped to fall to $36.2 billion and steadily decline over the forward estimates.
The Labor government, upon being elected in 2017, froze pay increases for public sector employees at $1000 per year.
Police officers have led protests against the four-year policy, which the government described as necessary to deal with a significant debt inheritance.
Treasurer Ben Wyatt on Wednesday said the wage freeze would continue, adding it was the biggest driver of spending growth restraint which was needed to insulate against sudden changes in GST revenue and iron ore prices.
“At this point we think the policy is appropriate and I’m not yet seeing any pressures that suggest the policy is out of date,” Mr Wyatt told reporters.
“We still need to maintain tight spending because we do need to have that impact on debt, we do need to do a significant asset investment program.
“We’re very much focused on job creation and I think that’s a better use of the money.”
The state’s public sector union said the wage policy was “outdated and unwarranted” given the budget projections.
“Our workers are falling behind because they have not received a pay increase that has kept up with the increasing costs of living,” CPSU secretary Rikki Hendon said.
The government has splashed out in recent months on changes to payroll tax and stamp duty, school and hospital maintenance projects, and road and rail projects.
Handing down the latest figures, Mr Wyatt said WA’s three per cent economic growth – driven by population increases and an associated spike in building approvals – remained the nation’s strongest despite coming in slightly lower than projected.
He played down talk of building a war chest for the 2021 election but said relieving cost of living pressures would be “front and centre” for next year’s budget.