No razzle-dazzle in Wyatt Budget
Treasurer Ben Wyatt is promising “healthy surpluses” for the WA Budget — but do not expect any excitement around them.
Mr Wyatt is coy about what constitutes a healthy surplus, especially as those surpluses will coincide with the next State election but he says the aim is to give ample protection to the Budget from the ebbs and flows of commodity prices.
His May Budget, which forecast a surplus in 2020-2021 of $1.3 billion, was criticised in some quarters for being boring — no big promises, no rhetorical flourishes, it was a “workmanlike Budget”.
Mr Wyatt said future Budgets would strike a similar tone.
“I’ll be very happy that if every Budget I hand down is described as boring,” he said.
“You have to walk that fine line on razzle-dazzle and being boring, and I’d rather be on the boring side.”
Premier Mark McGowan revealed this week that next year’s Budget would show a surplus of hundreds of millions of dollars.
But it could have been even larger.
Mr Wyatt revealed that if the cut-off for the inclusion of key economic parameters in the Budget had been at the start of last month rather than earlier this week, the Government would have had much more money on its hands.
A fall in oil and iron ore prices and a slightly stronger dollar in recent weeks have eaten into expected revenue flows.
Depending on global events, those three swing elements could also change the outcome in May. The biggest surplus this century was recorded in 2010-2011 when the Barnett government brought in a $1 billion surplus.
At the same time though, the overall Budget went backwards by $2 billion because of extra spending which lifted the net debt to $12 billion.
Net debt was forecast in May to reach $39.1 billion this year but on current trends is unlikely to reach that level.
And, if the Premier’s claims of a surplus in 2019-2020 come through, debt will be measurably lower.
While better commodity prices and strict spending constraints have contributed to the better Budget, Mr Wyatt said a broad-based improvement in the economy would power the State’s bottom line.
This week’s national accounts showed an improvement in State final demand on the back of private and government capital spending.
Mr Wyatt said there were positive signs about much of the local economy which was showing up in full-time jobs growth.
But two big areas — retail and property — continue to struggle.
“There’s definitely more upside risks for the Budget than in recent years,” Mr Wyatt said. “The retail side is still soft and hopefully that lift in full-time jobs will start to filter through.”
State Treasurer Ben Wyatt.