Shadow Treasurer Dr Steve Thomas says that the release of new state economic data on Tuesday shows that the current state boom is starting to slide but holding up better than expected.
“The biggest boom in our state’s history, which gave the Government to biggest surpluses of any state in our nation’s history, had to end eventually,” Dr Thomas said. “While it is not over yet, the correction we all knew was coming has certainly started.”
“The release of the latest Quarterly Financial Results Report from Treasury covers the first quarter of this financial year, and shows a large though expected decline in iron ore royalties income,” Dr Thomas said.
“The 2019-22 boom was built almost entirely on the massive iron royalties the State has received as the price of the commodity skyrocketed, with some assistance from the new GST floor introduced in 2019-20.
“Royalty income dropped by a billion dollars compared to the same period last financial year, reflecting the start of the price correction. It still has a way to go, but it is not all bad news.”
“The May state budget assumed an iron ore price of US$77.50 this financial year, and yesterday’s report shows an average price for the first quarter of US$103.5,” Dr Thomas said. “That means even though royalty income has dropped it is still over half a billion dollars above the budget estimate in the last three months alone.”
“The end of the boom is coming, but it is not here yet. The McGowan Government continues to reap extra income into their money bin this year.
“Luckily for the Treasurer his Government continues to reap in higher taxes from the WA community, with the total quarterly tax take also up over half a billion dollars since last year.
“Payroll tax alone is up $179 million in the three months period.”
Dr Thomas said the report also highlights the massive growth in Special Purpose Accounts, which have exploded in recent years as Mark McGowan squirrels away the huge surpluses of the boom for his future use on pet projects.
“This is another Treasury report that highlights the billions of dollars the Premier is keeping for his
own political benefit rather than the benefit of the people of this state.
“How Mark McGowan uses the greatest boom in our history will be the story of his leadership in years to come, and these Treasury reports are a frequent reminder of the wealth that has rained down on him without us seeing the benefit to the community that actually owns the money he collects.”