WA Budget 2018: Households cop big fee hikes to get finances back on track


May 10, 2018 16:29:37

The McGowan Government has used its second budget to argue its case for getting the state’s finances back on track, revealing a significant improvement in forecasts while slugging households with big hikes in fees and charges.

Treasurer Ben Wyatt used his second state budget to confirm increases to fees and charges that will cost the average household nearly $300 per year, headlined by a 7 per cent rise in power prices.

Key points

  • Deficit for 2018-19 of $1.3 billion
  • Return to surplus of $1.3 billion predicted for 2020-21
  • Debt to peak at $40.8 billion in 2020-21
  • Hikes in fees and charges total $292 for average household

Having promised a “no frills” budget, the Government locked in some money for its Metronet plans but committed little in the way of major new spending pledges.

But Premier Mark McGowan said the budget was proof his Government’s economic plan was working, with slashed spending, a large pool of Commonwealth funding and a boost in royalty income leading to a significant improvement in WA’s financial position.

A return to the black

WA is still expected to be back in the black by 2020-21, for the first time since 2014, with a $1.3 billion surplus predicted for that year.

The predicted deficit for this year is also substantially lower than previously forecast, at $1.3 billion.

The better-than-expected budget results will also limit the growth of net debt, which is now set to peak at $40.8 billion in 2020-21.

“Our second budget in eight months shows the McGowan Labor Government’s plan to get the state’s finances back on track is working,” Mr Wyatt said.

“The Government is gradually cleaning up the financial mess we inherited.”

The Government resisted the temptation to implement widespread tax hikes, locking in the introduction of its online gamblers tax from January 1 and confirming foreign property buyers would be slugged with a 7 per cent levy — up from the previously planned 4 per cent.

Hikes to utility bills, car rego

But there are substantial hits to households, with utility charges rising by an average of 6.3 per cent and motor vehicle licensing costs surging by 3.8 per cent.

Combined with the previously announced hike in the emergency services levy and a 1.5 per cent increase in standard public transport fares, the overall cost to the average household will be $292.

“We are not in a financial position to cut those planned increases unless we borrow more money to pay for it,” Mr McGowan said.

“Annual increases will continue to go down in coming years.”

The Government did reveal a $282 million budget hit caused by delays to the public sector redundancy program it announced last year.

Just 2,000 of the redundancies are expected to be finalised by June 30, leaving another 1,000 still to be completed to reach its target.

Additionally, the Government did not make any firm commitments about the potential sale of the TAB or Landcorp’s land title registry, saying both moves were still under consideration but were not locked in.

Rather than capitalising on asset sales, the budget is highly predicated on optimistic reductions in spending growth limiting it to just 1.2 per cent over the next four years.

That would be less than a fifth of the average spending growth seen under the former Barnett government.

The budget does lock in some funding for the Labor Government’s flagship Metronet project, but an overwhelming majority of that comes from the Commonwealth, with just $21 million allocated so far coming from the state.

But Mr Wyatt insisted those public transport plans would not be delayed, saying construction would commence next year on the Ellenbrook and Thornlie-Cockburn lines as well as the Yanchep extension.

The budget did raise the prospect of the Forrestfield Airport Link’s cost blowing out, because of contaminated soil dug out during the project which forced boring machines to shut down.

Elsewhere, court and tribunal fees, costs of industry regulation and clearing permits and mining tenement rents have all risen.





First posted

May 10, 2018 16:04:55

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