WA Government denies broken promises in budget

Updated

The WA Government concedes the state has a 'problem with debt', in handing down its first budget since the state election in March.

The Barnett Government expects to post a surplus of $386 million over the 2013/14 financial year, with debt predicted to rise to $22 billion. By the 2016/17 financial year, debt is expected to blow-out to $28.4 billion.

Treasurer Troy Buswell was frank on the issue of debt: "make no mistake, we have a problem with debt".

This financial year the state's economy is forecast to grow by 3.25 per cent - higher than the national growth forecast of 2.5 per cent.

The estimated surplus for last financial year is $239 million but the budget is expected to fall into deficit in the 2014/15 financial year.

The Government has confirmed it will break two of its big-ticket election promises by not delivering its MAX light rail and airport rail link in time by its self-imposed 2018 deadline.

Instead, it has now given both projects an 'anticipated completion' in 2019.

But Mr Buswell denied the new completion dates represented a broken election promise, saying both would still start construction in 2016.

He said he could not provide a final figure on how much private investment there would be in the two major rail projects, but hoped it would be significant.

The Federal Government has already committed $500 million in funding across those two rail projects.

'Financially challenging future' despite forecast growth

Infrastructure, particularly transport, was a key focus of this year's budget.

Mr Buswell said the Government would invest almost $27 billion in infrastructure over the next four year, including $5.7 billion on transport projects.

"To put that investment into perspective, that's the equivalent of four Perth to Mandurah railways," he said.

Mr Buswell said despite forecast growth, the state's rapidly growing population and subdued revenue performance meant WA faced a "financially challenging future."

"This state budget reflects tough but necessary decisions undertaken by the Government to secure our economic future through fundamentally reforming the way in which the public sector operates with the introduction of the $6.8 billion Fiscal Action Plan," he said.

As part of the Government's so-called Fiscal Action Plan, there will be a 12.5 per cent across-the board increase in land tax rates from 2013/14. This is expected to raise a total of $338 million over the four years to 2016/17.

The plan also includes the introduction of an ongoing program evaluation in the public sector, with targeted savings of $350 million over the next four years.

Fees increase as Buswell looks for savings

Private motor vehicle registration fees will also jump a further $36 a year from January next year, after Mr Buswell revealed the Government will halve the $72 concession it currently provides. This is expected to raise an estimated $155 million over the forward years.

From January next year the Government will introduce a new $4,000 a year fee for children of 457 visa holders to partly cover the costs of educating them at public schools. Mr Buswell said there were now 8,600 such children in WA schools.

In a bid to save money, the Government will also target the popular solar feed-in tariff scheme, with Mr Buswell describing the current 40 cent per kilowatt customer payment rate as "overly generous".

From 1 October, the rate will drop to 30 cents and by 1 July next year it will reduce to 20 cents.

Mr Buswell also confirmed there will be changes to the State's first homebuyers' grant scheme.

Currently the Government provides $7,000 for purchases of both new and established properties. Under the changes, the grant for established homes will drop to $3000, while the new house grant will jump to $10,000.

'Dire state'

The Opposition's labelled it a budget of broken election promises and "botched financial management".

Shadow Treasurer Ben Wyatt said the Budget confirmed the State's finances are in a dire state, and he was particularly concerned about a projected blow-out in State debt to $28.4 billion in 2016/17.

"Mr Barnett's out-of-control spending has effectively maxed out the State Government's credit card and future generations of Western Australian's will be left to pick up the tab," he said.

Topics: budget, perth-6000

First posted