WA Annual Report of State Finances released
Western Australia’s Annual Report on State Finances for 2012-2013 reveals the lowest rate of expense growth in 14 years at 3.7 per cent. Treasurer Troy Buswell said the annual report indicated WA’s economy grew strongly last financial year with State Final Demand at 4.9 per cent, the strongest growth of all Australian States. However, this strong economic growth has not flowed through to revenue, with total general government revenue only growing by two per cent last financial year.
The Treasurer said the low rate of revenue growth was due to a significant reduction in Commonwealth grants, which were down $823million compared to the year before, including the State’s GST revenue falling by $518million. The State Government recorded a general Government sector operating surplus of $249million for 2012-13, in line with the $239million estimated surplus in the 2013-14 State Budget. “The operating surplus was largely because of various measures implemented by the State Government to rein in recurrent expenditure growth throughout the year,” Mr Buswell said. “Reducing our spending is crucial to putting WA’s finances on a sustainable footing which is difficult at a time of unprecedented pressure on our infrastructure and services.”
The State Government continued its unprecedented investment in infrastructure with spending totalling $7.4billion for 2012-13 for building key projects like Fiona Stanley Hospital, Perth City Link and the new children’s hospital as well delivering key services by spending $1billion on electricity transmission infrastructure and $475million on schools. Mr. Buswell said: “This is essential spending necessary to support the State’s rapidly growing population.”
Net debt for the total public sector increased to $18.2billion at June 30, 2013, which is around $300million lower than estimated in the recent State Budget. Despite the recent loss of the triple-A credit rating by Standard and Poor’s, current net debt levels remain affordable, with net interest costs as a share of revenue (for the total non-financial public sector) reaching 2.3 per cent in 2012-13, well below the Government’s target limit of 4.5 per cent.
The State Government is focused on developing a plan to return the State to a triple-A credit rating, which includes reconsideration of timing on all of major infrastructure projects, a review of the Asset Investment Program, public sector workforce reform, and implementation of a new wages policy.
The 2012-13 Annual Review of State Finances is available from the Department of Treasury website at www.treasury.wa.gov.au