WA Budget 2017-18

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2017-18 Western Australian Budget Briefing Note

Tough decisions as Budget repair continues

A Deloitte Access Economics review of the latest State Budget.

Highlights from the 2017-18 Western Australian Budget

The new State Treasurer, Ben Wyatt, handed down his first Budget on 7 September 2017. Few WA Treasurers have inherited a worse set of books. The new State Government has had to make a number of difficult decisions to continue the process of repairing the WA State Budget.

Highlights
  • The operating balance of the General Government sector is expected to be $2.34bn in the red in 2017-18, although this is an improvement from an expected $3bn deficit in 2016-17. A return to surplus in not expected until 2020-21
  • A number of new revenue measures are expected to add an additional $2.1bn to general government revenue over the forward estimates period. This includes a progressive payroll tax scale targeted at large employers, and a higher gold royalty rate
  • The public service also feels some pain, with the State Government announcing a ‘Budget Repair Package’ consisting of a series of savings measures, including a cap on annual wage increases and a voluntary separation scheme
  • However, a big part of the State Government’s ability to return to surplus will depend on its management of the health; education; and public order and safety (POS) budgets. Failure to achieve lower spending growth in these areas could be disastrous for State finances. After all, health, education and POS will make up 64.8% of total government spending by 2020-21.
  • The net debt of the WA Public Sector is expected to continue to grow in future ($43bn by 2020-21) as General Government borrowings rise. A ‘Debt Repayment Account’ has been established in this Budget, into which any ‘windfall’ revenues will be credited and used to repay Consolidated Account borrowings. This is a good start, but more is needed to make in-roads into State debt.

2017-18 Western Australian Budget Briefing Note

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