Thursday, 22 December 2016
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Treasurer Mike Nahan said $527 million had been shaved off the forecast operating deficit, revised down from $3.9 billion in the May Budget to $3.4 billion for 2016-17, as well as improvements in net debt forecasts across the forward estimates. Dr Nahan said the recent increase in commodity prices, combined with increases in export volumes from major resources projects, was driving Western Australia's export sector. "Continuing strong growth in net exports, due to a ramp up in iron ore and LNG production, is expected to support growth in the economy over the budget period, albeit at slower rates than recent historical highs," the Treasurer said. "Economic growth has undoubtedly slowed, but the fact is we're still growing and the economy is now 40 per cent bigger than when we came to office in 2008-09." However, Dr Nahan warned the projected additional $3.7 billion in royalty income over the forward estimates was expected to be largely off-set by downward revisions to taxation revenue and GST grants, if GST reform was not forthcoming in the four-year budget period. "The State Government cannot stress enough how important reform of the grossly unfair GST distribution system is, as WA's higher royalty income will largely be redistributed to other States and Territories," he said. "The Mid-year Review shows that adjustments in the labour market, combined with a softer property market and a general easing in domestic economic activity, are expected to result in substantially lower payroll tax and transfer duty collections relative to budget." The Mid-year Review forecasts also demonstrate the ongoing success of Government efforts to improve the efficiency of the public sector and limit growth in general government expenditure as a result of the roll-out of the Agency Expenditure Review program, and the successful implementation of the Government's 1.5 per cent wages policy. Spending measures in the Mid-year Review include:
"The State Government will continue to progress our asset sales program, which represents a significant upside to the Mid year Review estimates given that these are only written into the estimates when sales are finalised," he said. Fact File
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