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Category: Government and Politics / Business, Economics and Finance

WA's deficit and debt reach record levels

Thursday, 22 Sep 2016 10:30:27 | Jacob Kagi

Treasurer Mike Nahan said the better than expected figures were of little comfort. (ABC News: Andrew O'Connor)

Western Australia has recorded slightly lower debt and deficit totals for the end of the 2015-16 financial year, but both markers are still at record levels.

The state's annual financial results released by Treasurer Mike Nahan revealed a final 2015-16 deficit of $2.021 billion, $16 million less than had been forecast when the budget was released in May.

Lower expenses were the driver of that result, with revenue still falling $6 million below what had been forecast.

The results revealed a continued drop in mining royalty revenue, with the final total falling $51 million, or 1.2 per cent from what was predicted in the May budget.

The Government has repeatedly blamed plummeting royalty revenue, as well as a sharp drop in GST returns, for its perilous financial position.

As of June 30, general government debt sat at $27.347 billion, slightly lower than the $27.860 billion figure predicted in May.

But debt is still predicted to keep rising dramatically in the coming years and was forecast in the May budget to reach $40 billion by June 30, 2019.

Dr Nahan admitted the slightly better than expected results were of little comfort.

"The public and I would prefer not to be where we are, I would prefer more money and prefer to have no deficit and much lower debt," he said.

"But it is where we are and we have to manage our way through it equitably.

"In tough economic times, we are doing a very good job of managing the state finances."

The Treasurer said the results backed up the need to proceed with a large-scale asset sales program, which has been flagged for some time but so far has only resulted in the $136 million sale of the Perth Market Authority.

May's budget predicted another sharp growth in deficit for 2016-17, to $3.9 billion.

The state is not forecast to return to surplus until 2019-20.

The release of the results follows the passage of a bill through the Legislative Assembly last night, allowing the Government to borrow an additional $1.7 billion.

That bill now proceeds to the Upper House and needs to pass by the end of October to prevent the Government running out of money.

AustraliaPlus


 

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