Government spending has increased by $2 billion since May and $4.8 billion over the next four years,which Under Treasurer Michael Barnes conceded was “more than a typical mid-year review”.
Of the $2 billion increase,$500 million will be spent on the government’s wages policy of 3 per cent or $3130 plus a $3000 cost-of-living payment.
Major spending changes in mid-year review
- $558 million for health and mental health spending including $27 million for pilot programs to improve hospital emergency departments
- $510 million in higher interest costs
- $200 million for the Collie Industrial Transition Fund
- $105 million for the investment attraction fund
- $232 in additional funding for the NDIS
- $34 million for family and domestic violence survivors
At the time of the May budget,the government had offered the public sector a 2.75 per cent per annum increase or a 2.5 per cent rise and a one-off payment of $1000.
Over the forward estimates,this upgraded policy will cost $1.4 billion more than the May offer and $3.3 billion in total.
Interest payments on debt accrued by the government are up by $500 million and over the forward estimates while the government’s ambitious asset investment program increased $1.1 billion to $35 billion.
In a move that has raised the opposition’s eyebrows,the budget bottom line was dealt a $1.4 billion hit thanks to dividends from government trading enterprises,such as Water Corporation,remaining in their accounts rather than being transferred into government revenue to fund the future desalination plant and power grid infrastructure upgrades.
Net debt was $1.5 billion lower than predicted in the May budget at $29.5 billion but is still projected to continue rising over the forward estimates. McGowan was unfazed by this and attributed it to conservative estimates of the iron ore price.
Despite resilience in the state’s accounts,the review predicts further drops in the iron ore price coupled with higher wages bills will see softer ongoing surpluses.
McGowan said his government would not budge on his wages policy,despite significant opposition from the nurses,police and other public sector unions.
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“That is our position,and it is far more generous than virtually anywhere in Australia and I just want them to get the money as soon as we possibly can get it into their pockets,” he said.
“As the budget shows the financial situation is deteriorating I don’t want us to end up in the terrible financial position of other states like New South Wales. I want to be able to protect us from them whilst providing generous pay increases for people.
“By being cautious and careful and budgeting prudently you can avoid dramatic outcomes in the future,which I suspect are just around the corner in other states.”
McGowan said the mid-year review showed the “continued strong economic and financial performance of Western Australia” and that the government could tackle impending global challenges.
Shadow treasurer Steve Thomas blasted the government’s accounting tactics by removing government trading enterprise dividends from the budget.
“Mark McGowan is rolling in cash again,he’s also hiding the amount of money that he’s got,” he said.
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“He has again not taken dividends from the state trading enterprises,he’s hiding a billion and a half dollars to make sure that the people think he’s poorer than he is.
“He might be pretending to be poor,but once again,he is Scrooge McDuck,and I don’t think he can fit any more money in his money bin.”
Thomas said the government should be transparent with West Australians about how much money the state has in its coffers and use the revenue windfalls on reforming taxes such as payroll tax and increasing penalty rates for frontline workers such as nurses to bolster up the state’s strained health system.
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