WA debt grow­ing quickly: Trea­sury

Pilbara News - - Election 2017 - Shane Wright

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.

Pic­ture: Meagan Pow­ell

Trea­surer Mike Na­han used his pre-Christ­mas Bud­get up­date to pre­dict a deficit of $3.3 bil­lion this year.

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