Another big budget surplus; another big missed opportunity

The Shadow Treasurer Dr Steve Thomas says that the confirmation of another massive budget surplus reflects another lost opportunity to reform the boom-and-bust economy, just as the state starts moving away from the latest boom.
“This financial year’s projected surplus of $5.7 billion comes on top of last year’s $5.8 billion record, as a result of high iron ore prices, the GST floor implemented by the Commonwealth and higher state taxes and charges” Dr Thomas said.
“It has come in as expected and close to the $6 billion to $7 billion range I predicted weeks ago.
“The Government is looking at $20 billion in surpluses over five years, and it represents the biggest economic boom of any state in Australia’s history.”
“The good financial position the State finds itself in is not the product of good financial management but of record revenues, the only part of which the Premier can claim credit for is higher state taxation.”
Dr Thomas said that the wealth pouring into the state’s coffers allowed the Government to announce some spending that he welcomed, including the $400 electricity rebate to families.
“I am glad to see the Government recognise the need for cost-of-living relief, even in the modest form announced today” Dr Thomas said.
“However once again we have massive budget surplus but no plan for economic reform, and an inadequate debt repayment program.”
“The only time you can engage in economic reform is when you have the cash reserve to do so, and our state will never have a better opportunity than right now.”
“Sadly the budget released today does nothing in the area of economic or tax reform, making it again a huge missed opportunity.”
“We need to take the foot of the hose of small and medium business by cutting payroll tax and addressing the burden of over-regulation, so that they can provide the jobs and growth of the future when mining goes back to bust.”
“If we miss this opportunity provided by the wealth pouring onto Mark McGowan’s money bin, we will have let future generations down.”
Dr Thomas said that the massive income also demanded a proper debt reduction process.
“Mark McGowan promised in 2017 to legislate to ensure half of all iron ore royalties would go to repay debt, “to protect future iron ore windfalls from being exploited by future Governments,” Dr Thomas said.
“His is now the Government exploiting the biggest iron ore windfalls in history, leaving future generations to pay the debt when the iron ore price corrects and budgets go back to being line ball.
“This is selfishness in the extreme, and history should judge the McGowan Government as such.
“Since the start of the current boom, iron ore royalties to the state have been $7 billion in 2019-20, $11 billion in 2020-21 and now $10 billion in 2021-22.
“Half of that total would be $14 billion coming off state debt if the Premier kept his word.
“If the Premier actually kept his promise he would have paid $14 billion off the debt instead of leaving it for future generations to try to find the money.
“I am pleased to see that Total Public Sector net debt is expected to drop briefly this financial year to $30 billion, but am deeply concerned that it is projected to rise steadily after again that to $34 billion in 2025-26.
“The McGowan Government inherited Total Public Sector net debt in 2017 of $34.6 billion, which means that in eight years of Mark McGowan as Premier will see him paying down a measly $0.6 billion of debt during the greatest fiscal boom of any State in Australia’s history!”
Dr Thomas said that the Government had a problem project and service delivery, and was developing a reputation of being unable to deliver.
“Despite massive surpluses over the last few years, service delivery has been poor, and projects continue to blow out in time and cost.”
“Some of this can be explained by the lack of labour and materials that the whole world is struggling with, so I am happy to cut the Government some slack before criticising” Dr Thomas said.
“But this Government has been unable to manage the health system, and its major projects have blown out massively.”
“For example, METRONET started as a $3 billion investment, but it’s now years behind schedule with costs at least $7 billion and continuing to rise.”
“Mark McGowan runs the risk of being branded as the Premier with the greatest opportunity to deliver in Western Australia’s history, but he just couldn’t get it done.”