West Australia has been for many years in a phantastic mining boom.
However:
Troy Buswell's budget battles to stay in black
Michael Hopkin
August 8, 2013 - WAtoday
Winners and losers
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'$28 billion debt monster': opposition Treasurer Troy Buswell has unveiled a raft of budget savings as he battles to keep state debt in check and preserve an increasingly precarious budget surplus.
This year the state is set to post a $386 million surplus, but Mr Buswell admitted he is fighting to avert a forecast deficit next year amid what he described as a "challenging climate".
The new budget contains a "fiscal action plan" which aims to save $6.8 billion over four years, partly by scrapping financial breaks for solar power users, motorists and first-time homebuyers.
Under the plans, land tax will increased by 12.5 per cent, while parents on 457 visas will have to pay $4000 a year to send their children to school.
The solar feed-in tariff will fall from 40 cents to 20 cents, while at the same time electricity prices increase by 4 per cent.
And the first homebuyer grant will fall from $7000 to $3000 for those buying existing properties, although the grant for buyers of newly built houses will rise to $10,000.
Mr Buswell said the plans were partly a response to WA's population growth, which saw the state swell by 75,000 people in the past year.
The savings plan will also burden the successful Royalties for Regions program with an extra $1.3 billion in spending this year, as well as calling for 1000 public sector workers to volunteer for redundancy.
Nationals leader Brendon Grylls, who founded the program, denied that the original vision of the project had been watered down, saying that it had been a success, and that he was happy for Royalties for Regions to contribute to protecting the budget as a whole.
Mr Buswell also locked in $5.7 billion in spending on big-ticket transport infrastructure, including the airport rail link, the MAX light rail system, and the Swan Valley bypass, also known as the Perth-Darwin Highway.
The projects, which will also rely on Commonwealth funding, will need significant investment from the private sector in order to be delivered by their 2019 completion dates.
Mr Buswell said he did not know how much private funding would be involved, and had therefore provisionally written the projects up as state debt for the time being.
Although the WA economy is set to swell by 3.25 per cent over the coming year – making it the fastest growing in the nation – Mr Buswell said people would have to take a "reality pill" after a year that has seen business investment falter as the resources industry ends its construction boom.
Mr Buswell said the government was battling to stave off the state's spiralling debt, set to hit $28.4 billion by 2017.
"Make no mistake, we have an issue with debt. This is an issue we have to confront," he said.
Mr Buswell said this year's budget savings were just the start of a longer process, with economic modelling suggesting that debt is forecast to rise for the next decade.
But he pointed to what he described as the "complete evaporation" of WA's GST revenue share as part of the reason for the swirling debt problem.
Despite having 11 per cent of Australia's population, WA is set to receive just 0.9 per cent of the national GST carve-up by 2017. As a result, revenues will dwindle from $3 billion to around $500 million.
Mr Buswell said a GST share in line with population would represent an extra $21.1 billion across the next four budgets – well and truly enough to rein in the state's debt.
Reactions
Real Estate Institute of WA president David Airey:
A 12.5 per cent increase in land tax is "a kick in the shins to property investors" and "will affect ongoing investment"
A decrease of $4000 in the first home owners grant for established homes "will disappoint a lot of people"
"Seven out of ten first home buyers choose established homes ... you can't force people to go and live in the suburbs in a new estate"
Sustainable Energy Association chief executive Kirsten Rose:
Halving the residential solar feed-in tariff rate "is disappointing, regressive and a massive betrayal of public trust"
"It will affect more than 75,000 WA households
"Households were promised in writing that they would receive a set price for the electricity they exported for 10 years"
Australian Hotels Association chief executive Bradley Woods:
Disappointed by $2 million in extra funding for Tourism WA's marketing after an election promise of an extra $6 million
Association of Mining and Exploration Companies chief executive Simon Bennison:
CPI increases in utility charges and mining tenement fees, and the mine safety levy are a concern and add to the cost of doing business in WA
But a reduction in red tape and further streamlining of the mining and exploration approval process is positive
- with AAP
http://www.watoday.com.au/wa-news/troy-buswells-budget-battles-to-stay-in-black-20130808-2rk47.html
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