Election 2013 Western Australia March 9

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iT Matters State Finances

Strong growth and $140m surplus in mid-year review

Ministerial Statement

Western Australia is expected to record a $140million operating surplus in 2012-13, Treasurer Troy Buswell said today as he released the 2012-13 mid-year review.
“Underpinned by strong growth in business investment, the WA economy continues to outperform other jurisdictions and drive the national economy,” Mr Buswell said.
“Despite ongoing uncertainty around the world, the WA economy grew by a record 6.7 per cent in 2011-12 and is now expected to grow by 6 per cent in 2012-13, up from 4.75 per cent at budget-time. The State Government’s decisive action to curtail unnecessary spending by departments has protected the surplus.
“WA’s strong economy continues to draw people to the State, with WA’s population growing by an extraordinary 1,500 people each week over the past year. While strong economic and population growth delivers great benefits, it also drives significant demand for government services and infrastructure. 
“This mid-year review contains new spending to address these demand pressures, and provide essential services for our community.”
Funding includes:
  • $85million in 2012-13 to meet higher than anticipated demand for hospital services, including an additional $20million for elective surgery
  • $55million in 2012-13, and a further $267million over the following three years, to meet additional costs associated with higher than forecast student enrolments
  • $410million over the four years to 2015-16 for high priority transport infrastructure projects including an extension of the Mitchell Freeway from Burns Beach Road to Hester Avenue and local government road projects. 
“WA’s revised surplus estimate is one of only two surpluses forecast by States and Territories in 2012-13, and is expected to be achieved despite a weaker revenue outlook relative to the budget forecast,” the Treasurer said.
In response to the weaker revenue outlook and increased demand for services, the Liberal-National Government has implemented a range of savings measures since the 2012-13 State Budget. Together, these measures are estimated to save around $527million in 2012-13.
“Had these measures not been implemented, the State would be facing an operating deficit of $387million, rather than the $140million surplus now forecast,” Mr Buswell said.
“The State Government is delivering a record infrastructure program to support WA’s growing population and robust economic growth.
“The Government’s Asset Investment Program is expected to total $27.4billion over the four years to 2015-16, up $1billion since the Budget, including expenditure of $7.3billion in 2012-13 on health, electricity, transport and other critical infrastructure.
“The latest estimate for net debt this year is $18.2billion, down from $18.6billion at budget time.
“It is now clear that, given the pressure on the State’s finances due to increased demand for services through population growth, and volatile factors including iron ore prices and the exchange rate, Labor has already dug a big budget black hole through making promises to the electorate that the State cannot afford.
“This mid-year review sets the financial parameters within which the election campaign will be fought.  Labor’s promises have already broken the bank.”

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