STATE BUDGET 2006-07: BUILDING ON THE BOOM - Financial responsibility.

11/05/06
A strong Budget result underpins the Carpenter Government's commitment to improve services, build vital infrastructure, boost economic growth and keep household costs down.
Treasurer Eric Ripper today said disciplined financial management had enabled the Government to deliver an operating surplus for the sixth year in a row, with healthy surpluses in years to come.
"The Carpenter Government's disciplined approach to financial management gives us the confidence and capacity to make decisions for tomorrow, not just for today," Mr Ripper said.
"It is enabling us to deliver a record $18.1billion building program, with $5.2billion more being spent in 2006-07 on providing education, health, community safety and economic infrastructure, while keeping costs down for Western Australian families.
"Every cent of the projected $1.275billion operating surplus in 2006-07 will be used to fund the building program - including the start of the new Perth-Bunbury Highway - which will help keep debt levels to a minimum.
"The 2005-06 surplus is being returned to Western Australians through the elimination of all New MetroRail debt. This is a significant dividend - future generations will inherit a debt-free rail line."
Mr Ripper said the Government had used recent surpluses to cut about $1billion off the State's mortgage, including $322million in debt left over from the botched privatisation of Westrail Freight by the previous Court government.
"With our robust surpluses and repayment of debt it is little wonder we continue to have AAA credit ratings for WA," he said.
The Treasurer said the economic outlook for WA was strong.
"WA is the powerhouse of the national economy. Since 2000-01, our economy has grown in real terms by 30 per cent, compared with national growth of only 17 per cent," he said.
"In 2006-07, the WA economy is forecast to grow by a further 5.25 per cent. Net trade (exports less imports) are forecast to grow by 10.0 per cent, as the large increase in the State's business investment in recent years flows through into higher production."
However, Mr Ripper said that in framing the Budget, the Government had not been blinded by the State's stellar performance.
"As responsible financial managers, we have made decisions based on the Budget capacity expected over the medium term, rather than the peak of the economic cycle," the Treasurer said.
"A significant factor in framing this Budget for the longer term is the delayed impact of the Grants Commission process on our share of Commonwealth GST funding. The current boom is expected to cost the State almost $700million in GST grants by 2009-10 - a significant constraint on our future finances.
"The 2006-07 Budget uses the benefits flowing from our booming economy to cement the foundations for continued growth, while maintaining the State's AAA credit rating - with net debt at affordable and sustainable levels."
Treasurer's office: 9222 8788