State Budget 2009-10: Capital Works Audit

Almost $3.2billion in capital expenditure savings will be realised over the forward estimates period as a result of the State Government's Capital Works Audit, Treasurer Troy Buswell said today.

Mr Buswell said the multi-billion dollar capital savings program would result in a $3billion reduction in net debt over the period.

"Within weeks of being elected, the Liberal-National Government vowed to undertake a comprehensive Capital Works Audit as part of the 2009-10 Budget process,'' he said.

"The results of this audit show the Government's resolve to manage the State's finances prudently while supporting jobs and investment.

"The previous Labor government's wish-list of projects would have put enormous pressure on the State's finances and alone could have jeopardised our Standard and Poor's AAA credit rating.

"The Government wants to maintain that AAA rating so that we can borrow at the best possible price because we want every dollar this State spends to be a dollar that supports jobs, particularly in the current economic climate.

"The audit has also given the Government an opportunity to reprioritise our capital works program and to direct more funds to projects such as the $117million forward works program for the construction of a new children's hospital."

The Government initiated the Capital Works Audit in October 2008 to reassess approved capital projects, with a pre-tender estimate of greater than $20million, in light of the current economic circumstances and the Government's own priorities.

In all, capital expenditure savings of $3.2billion have been realised across the forward estimates period through the identification of lower priority projects that have been either deferred or cancelled.

Specific outcomes of the audit include:

. the Government has deferred a decision on the development of a major outdoor stadium for two years
. the Government has decided not to proceed with the development of a new museum at the East Perth Power Station site (the budget includes $5million in 2009-10 to enable planning for the redevelopment of the Perth Cultural Centre and Museum)
. deferral of specific electricity transmission projects such as the North Country Reinforcement and Southwest Bulk Reinforcement 330kV transmission lines, given the rapid change in the economic environment
. the cancellation or deferral of various road projects considered of lower priority and/or do not fit current policy settings
. deferral of the Ellenbrook Railway Line (the Budget includes $10million in 2012-13 to develop detailed planning for this project)
. deferral of the Agriculture Headquarters and Biosecurity relocation and the Agriculture Research Western Australia projects, to enable a full review of their business cases, including consideration of alternative procurement and site options.

The following table summarises the identified capital expenditure savings by agency. 

CAPITAL WORKS AUDIT SAVINGS

AGGREGATE BY AGENCY