Budget aims to stimulate growth, promote jobs

16/9/93

Premier and Treasurer Richard Court today delivered a State Budget directed at stimulating economic growth and producing more jobs for Western Australians.

The Coalition Government's first Budget contains no new taxes and no tax increases, apart from the previously announced rise in the tobacco franchise rate.

The Premier told Parliament the Budget aimed to:

·       arrest the growth in the State's $11.8 billion debt by eliminating the deficit on the Consolidated Fund by the end of the Coalition's first term in office;

·       meet the real needs of the community for Government services in the most cost effective way; and,

·       provide an environment conducive to business and new investment projects.

"Difficult times do not pass by chance - decisive measures have to be taken," Mr Court said.

"The Government will constantly strive to show the rest of the world that Western Australia is a desirable place in which to invest, and that we have the necessary skills, management ability and - above all - the stability and integrity of Government to justify the confidence of international investors."

Mr Court said the Government's highest priorities were to restore trust in Government management and to repair the finances and financial reputation of the State.

"This Budget abandons the misleading focus on the Consolidated Revenue Fund and its balanced results," he said.

"In keeping with the rest of Australia, we have moved to a Consolidated Fund which unambiguously reveals the State's true financial position."

Mr Court said the State's net financing requirement - the draw on private sector savings - would be $165 million this financial year, 26.7 per cent less than last year.

"It is simply not possible in one year to redress the mistakes of the past and reverse a decade of Labor mismanagement.  This Budget sets us on the path to restoring the strength and stability of the State's finances," he said.

Western Australia's economy was forecast to grow at four per cent this financial year - up one per cent on the previous year.

The Premier said that a healthy private sector provided the opportunity to improve the living standards of all Western Australians.

Accordingly, assistance to the private sector included:

·       an increase of 20 per cent in the payroll tax exemption threshold, exempting another 500 small to medium-sized Western Australian businesses and benefiting another 3,500 businesses;

·       an extension of the current payroll tax exemption for wages paid to first year apprentices to wages paid to all apprentices;

·       changes to the land tax system to eliminate counter-cyclical increases due to infrequent valuations and their phasing in for tax assessment purposes; and,

·       the abolition of stamp duty on interstate cheques.

The Premier said the new moves built on measures already announced including a reduction of up to 10.6 per cent in industrial electricity tariffs and the abolition of SECWA's security deposit scheme which would return up to $20 million to businesses.

Mr Court said the move to a user-pays pricing system for water would help the business sector and the Government would also examine options for a fairer system of commercial sewerage and drainage rating.

The Premier said the deficit on the Consolidated Fund was projected at $226.7 million compared with $272 million in the last financial year.

After adjusting for accounting changes, revenue would increase in real terms by about three per cent compared with about 4.7 per cent last year calculated on a comparable basis and after allowing for redundancy borrowings which were brought to account as revenue in 1991-92.

The Premier said the Government's tight hold on expenditure was reflected in an underlying real increase of 1.7 per cent.

Mr Court said it had been difficult to contain expenditure at such a low level because of debt-servicing costs resulting from the decisions of the previous Labor government.

The task of determining expenditure had been made even more difficult by economic factors and unreal expectations generated by former Labor governments.

Features of the Budget's expenditure allocations included:

·       an increase of $64.6 million (five per cent) to $1.39 billion on spending by the Health Department, including capital works costing $87.7 million;

·       spending by the Ministry of Education up $48.2 million (4.2 per cent) to $1.2 billion, including provision for an additional 356 teachers and support staff;

·       an extra $27.4 million (13.7 per cent) to vocational education and training, after adjusting for the State's contributions to the Australian National Training Authority;

·       an additional $8.2 million (7.5 per cent) to the Department for Community Development which would provide a record $40.2 million to non-government agencies;

·       an extra $17.1 million (seven per cent) to the police; and,

·       an increase of $116.3 million (8.2 per cent) to $1.54 billion in the State's total capital works program.

The Premier said that the Main Roads Department budget included an additional $34.7 million (18.6 per cent) from State revenues for roads.

Mr Court said that priority had been given in the Budget to areas which would help Western Australia maximise its international competitiveness.

"Led by the mining sector, private investment in Western Australia is showing encouraging growth and is the strongest of all States," he said.

In 1993-94, the Department of Minerals and Energy would spend $82.1 million - an increase of 17.5 per cent - including $11 million towards the construction of the Minerals Research Centre in Bentley.

"The Coalition Government is committed to restoring confidence and certainty to the mining industry to encourage the risk investment needed for mineral exploration, research and the development of more value-adding industries."

Mr Court said that uncertainty created by Federal proposals in response to the Mabo High Court decision continued to be of great concern to the Government.

The Budget provided $1 million for a Mabo unit to address these concerns and to handle the communication and information demands of the public, business and industry.

An additional $1 million had been set aside for the legal defence of Mabo-style claims.

The Premier said the only new revenue-raising measure in the Budget was an increase from four per cent to five per cent in the statutory levy paid by SECWA, the Water Authority and country water boards.

The increase would be absorbed by the authorities without any increase to existing electricity or water charges.

The Premier told Parliament that Western Australia had much to be confident about despite the difficulties the Government faced in bringing the State's finances back on to an even keel.

"I have complete confidence in the future of this State and my Government is committed to policies directed to promoting economic development and job opportunities and to enhancing the quality of life for all Western Australians," Mr Court said.