Western Australia’s finances are continuing to go from strength-to-strength, with Treasurer Rita Saffioti handing down a healthy set of books in her first major test in the role.
The state’s surplus – a measure former Premier Mark McGowan was always so proud of – has grown by $400 million from his last budget, but that’s still smaller than what was expected.
So where has the money come from, where’s it going and who benefits?
What are the key figures?
The big one is the surplus – which is now expected to be $3.7 billion dollars, up from the $3.3 billion forecast in May’s budget.
Part of that is down to iron ore prices. The government always forecasts them to be on the lower end, to avoid budgeting money they don’t have.
Yet again, prices have remained high and added extra money to the coffers, although it has been moderated by lithium prices falling by 80 per cent, taking about $550 million out of the budget.
All up, the state is getting $2.2 billion more than it expected, but expenses have risen by $1.8 billion – leaving just $400 million extra left over.
The state’s economy is also growing stronger than expected, with growth revised up from 3 per cent to 4.5 per cent.
Weren’t we expecting a bigger surplus?
Some had been predicting the surplus could rise much further than it has, closer to $6 or $7 billion.
The reason it hasn’t is because the government has allocated that money to future projects – or as Ms Saffioti described it “bringing to book” the government’s plans.
It basically means instead of the extra money floating around in surplus, it’s been put into the bucket for something in the future, like the $2.8 billion earmarked for the desalination plant which will be built in Alkimos.
An extra $2.2 billion will be spent paying down the state’s massive debt bill, and organisations like Water Corporation and Western Power will keep their profits to reinvest in future projects, like upgrading the electricity grid.
So where is that money going?
There are a few new announcements, but nothing groundbreaking.
One of the biggest new costs is $1.4 billion for rising costs across ongoing projects, with about half of that allocated to paying for Metronet getting more expensive.
ABC News: Rick Rifici
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The Treasurer said much of that was about finalising projects nearing completion, reflecting “high labour costs and supply costs” – which she said was worth the money for projects which would set the state up for generations to come.
There’s also an extra $209 million to invest in social housing and homelessness support, $626 million across the health system and $547 million for disaster recovery initiatives.
What about cost of living?
There’s not a lot of new cost of living measures in the budget, but in welcome news the state believes inflation has peaked and will start coming down over the years ahead.
While it’s expected to sit at five per cent this financial year, the government’s predicting that to soften to four per cent next year, and three per cent the year after that.
Ms Saffioti pointed to measures the government had already rolled out, like electricity credits and support payments, its $24.4 million rent relief scheme and free public transport for five weeks across the end of this month and January.
She said while she understood the challenges of families, things like reducing housing pressure and improving the broader economy would help everyone.
“Our economic growth is fundamental to Western Australians having the opportunity to participate in the workforce,” Ms Saffioti said.
“We need to continue to get people jobs and good jobs in Western Australia, and that’s why we’ve undertaken a number of programs like the fee-free TAFE.
“We need to continue to create more jobs, but also have them more available to more people in WA.”
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