McGowan Government getting WA's finances back on track

• Ongoing responsible financial management has the Budget on track to return to surplus
• Forecast surplus of $1.3 billion expected in 2020-21
• In just five months, the expected deficit for 2017-18 has been halved to $1.3 billion
• Expense growth of just 0.9 per cent in 2018-19, and an average of 1.2 per cent per annum over the forward estimates period
• Forecast net debt position at June 30, 2021 has improved by $3.2 billion
• Net debt projected to peak at $40.9 billion at June 30, 2020, before declining to $39.7 billion by June 30, 2022 

The McGowan Labor Government's responsible financial management has resulted in the State Budget being on track to return to surplus in 2020-21.

The State Budget today revealed the lowest growth in recurrent expense in more than 20 years, of just 0.9 per cent. Annual average expense growth across the forward estimates period has been constrained to just 1.2 per cent, well below the 6.7 per cent average over the past decade.

The State Budget also shows a total net operating surplus position of $1.8 billion across the forward estimates period.  Since the 2018-19 Budget, the total net operating position has improved by $2.8 billion over the 2017-18 to 2019-20 period.

The improving general government operating balance is expected to see total public sector net debt peak at $40.9 billion, before declining to $39.7 billion by the end of the forward estimates period. This is a substantial $3.2 billion improvement on the forecast level of net debt (at June 30, 2021) since the 2017-18 Budget.

The Western Australian economy is forecast to grow by 3.25 per cent in 2018-19, following estimated growth of 2.5 per cent in 2017-18. A return to more balanced growth across the economy will support employment, with thousands of new jobs to be created - in addition to the 30,000 created since the election of the McGowan Government.

These outcomes are being achieved while delivering high-quality services and key job-creating infrastructure. New spending initiatives in this Budget are largely funded through reprioritising existing expenditure, new Budget repair measures, targeted increases in user charges, and by working constructively with the Commonwealth to secure additional funding for priority infrastructure projects.

Significant progress has been made in implementing the Budget repair measures announced as part of last year's Budget, with the majority of these measures now in place. In particular, about 2,000 separations of the 3,000 Voluntary Targeted Separation Scheme are expected to be finalised by June 30, 2018 (with the remaining 1,000 separations to be achieved over the forward estimates period), and the new temporary progressive payroll tax scale for large employers has now been legislated for commencement from July 1, 2018.

For more 2018-19 Budget information, visit http://www.ourstatebudget.wa.gov.au

Comments attributed to Treasurer Ben Wyatt:

"The McGowan Labor Government is delivering responsible financial management, particularly containing the rate of expenditure growth through a focused and disciplined approach to expenditure review and prioritisation.

"We are on track to return to an operating surplus in 2020-21, the first surplus outcome since 2013-14, and after the previous Liberal National Government racked up nearly $5 billion worth of deficits in their last three years in office.

"The plan to keep expense growth low is paying dividends - it is absolutely critical to getting the State's finances back on track.

"By fighting for a fair share for Western Australia and constructively working with the Federal Government, we have allocated $1.2 billion in additional infrastructure funding over the Budget period. This is allowing for further investment in job-creating projects.

"As we have always said, we are committed to reducing net debt gradually over time and will continue working to bring it down further. The $3.2 billion improvement in the State's forecast net debt position underlines the progress we are making to turn the State's finances around."

Treasurer's office - 6552 5900