Gallop Government makes down payment on debt

23/9/03
Financial results for 2002-03 released today reveal the Gallop Government has slashed State debt by $1.4billion, compared with the original Budget forecast.
Treasurer Eric Ripper said tight financial management and better than expected revenue in 2002-03 meant the Government was able to reduce debt and achieve a balanced Budget.
Releasing the results, Mr Ripper said State debt came in at $4.47billion - $1.4billion lower than the original Budget forecast of $5.86billion. The result was also lower than the official forecast for the last year of the Liberal/National government.
The low debt levels also meant a record net debt to revenue ratio of 32.3 per cent, well under the 47 per cent safety threshold to protect the AAA credit rating.
Mr Ripper said the results drove a stake through the heart of the Liberals' claim that debt was out of control.
"These results put beyond doubt the affordability of the southern railway project and our intention to build it in the long-term interests of Western Australia," he said.
"It is clear now that Labor is the only political party in the State that has the will and the financial discipline to deliver the project.
"The Government is investing in community priorities and building infrastructure for the long-term economic growth. But we are doing so without selling off assets and without letting the Budget slide into deficit."
Mr Ripper said the Liberals delivered five Budget deficits in eight years, sold off $4.9billion in State assets and jeopardised the AAA credit rating through overspending.
He said the revenue windfall in 2002-03 delivered a $250million Budget surplus, which was the best result in seven years. But it was built on the better than expected performance of the property market and an oil price inflated by the war in Iraq.
"Windfalls, by definition, are not sustainable. The bubble will burst. So instead of spending up to the limit we have invested in the future by reducing our State borrowings," the Treasurer said.
"Using last year's surplus to pay for the salaries of public servants would be like using your mortgage repayments to pay grocery bills. It would be irresponsible and reckless."
Mr Ripper said despite the balanced Budget for 2002-03, spending control was still critical.
"In underlying terms, expense growth was just 3.6 per cent in 2002-03, slightly more than forecast because of decisions to provide extra funding for homelessness, drought relief, child protection and firefighting," he said.
"Strong financial results last financial year do not justify a spending binge this year.
"Discipline must be maintained because the Government faces wage pressures, reduced Commonwealth grants - including competition payments - and adverse exchange rate movements."
Mr Ripper said sustainable finances were necessary for Labor to meet its long-term economic, social and environmental goals.
Treasurer's office: 9222 8788
KEY FACTS
General Government operating balance

	1999-2000	2000-01	2001-02	2002-03
Pre-election forecast ($m)	$4,974.3	$4,581.7**	$4,949.7	$5,444.3
02-03 Budget forecast($m)	N/a	N/a	$5,272.1	$5,857.3
Actual ($m)	$4,974.3*	$4,381.1	$4,490.8	$4,465.2