WA debt growing quickly: Treasury
The WA Treasury has warned government debt is growing almost out of control and costing taxpayers millions of dollars in extra interest in a political spinfree Budget update.
In its own report on the State’s finances, Treasury believes without change, the budget will not get back into the black until at least the next decade.
Total debt is expected to reach $41.5 billion by 2019-20 while one of the fastest growing costs is the State’s interest bill.
Just before Christmas Treasurer Mike Nahan used his Budget update to predict a deficit of $3.3 billion this year which would eventually turn into a surplus of $521 million by 2019-20.
Better iron ore prices has delivered a small windfall, with Treasury believing this year’s deficit will now hit $3 billion.
Next year’s deficit would be marginally better at $1.5 billion but beyond that, deficits are now pencilled in.
A problem is a fall in GST, expected because of the lift in iron ore, while the soggy domestic economy continues to steal revenue from the Budget.
Under Treasurer Michael Barnes also warned that overall debt levels were climbing quickly.
“The overall quantum — and trajectory — of the State’s debt levels is of concern,” he said.
“Western Australia is facing a significant debt challenge and the incoming government will need a clear and robust plan for addressing this challenge.”
Mr Barnes also noted that much more debt was being held in the general government sector which takes in areas such as health, education and police services.
Interest on debt in this sector is set to almost double to $1.2 billion by 2019-20.
The Treasury has downgraded almost all of the forecasts that were made just six weeks ago, with the domestic side of the economy tipped to shrink by 6.75 per cent. In December it had predicted the non-export and import part of the economy to contract by 6 per cent.
Treasurer Mike Nahan used his pre-Christmas Budget update to predict a deficit of $3.3 billion this year.