No raz­zle-daz­zle in Wy­att Bud­get

The West Australian - - NEWS - Shane Wright Eco­nomics Ed­i­tor

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.”

Pic­ture: Danella Be­vis

State Trea­surer Ben Wy­att.

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