WA’s flush budget bucks national trend
A record surplus fueled by rising mining royalties and improved tax revenue is expected in Western Australia’s budget.
The surplus in Thursday’s financial document could stretch well beyond $7 billion according to some commentators.
Mark McGowan’s government has already announced billions of dollars in new spending measures, from health care to electric vehicle rebates, amid improving balance sheets.
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The Labor leader signaled on Wednesday that the main aim was to reduce pressures on the cost of living.
‘Every other state in Australia is in deficit and running up big debts…we are doing the opposite…and that gives room to do more in terms of the cost of living,’ he said .
Shadow Treasurer Steve Thomas speculated that the budget would include an electricity rebate, but argued that a freeze on all government fees and charges would bring the best relief to households.
The state’s public health system will get a boost, as hospitals battle COVID-19 and acute workforce pressures.
The government has allocated an additional $1.6 billion for the pandemic response, including $635 million to continue providing free rapid antigen tests to WA residents. The state recorded its highest daily infection rate of 17,033 on Wednesday.
Spending on mental health, alcohol and other drug-related services is also expected to climb to a record $1.3 billion in 2022/23. And health infrastructure — like $16.7 million for 10 more beds at ICU Sir Charles Gairdner — is getting $1.6 billion over four years.
The state’s AMA chairman argues that some of the pre-budget health announcements are being revamped.
“The McGowan government is incredibly good at double counting money and counting money in more than one place,” Mark Duncan-Smith said.
Health Minister Amber-Jade Sanderson also announced an additional $252 million for emergency services, amid a sustained surge in the ramp-up of ambulances as patients wait longer to be seen. transferred from paramedics to hospital care.
She also promised to chair a new ministerial task force to resolve what St John Ambulance described as a near-record ambulance backlog.
“I’m encouraged by this…one can only hope that we can find short, medium and long term solutions to this,” Dr Duncan-Smith said.
WA posted the highest inflation figures of any state and territory last month, at 7.6%. With growing pressure on household budgets, Shelter WA CEO Michelle Mackenzie said there was a desperate need for affordable rental housing.
She called on the government to create a “future fund” for housing.
“This way we know that in the future there will be continued investment in safe and stable, affordable and social housing.
“What a legacy that would be.”
S&P Global analysts have predicted that WA will continue to post “healthy” operating surpluses as tax revenues increase. In its State of Western Australia report in March, surpluses are projected to reach $7.9 billion in 2022/23, $5.8 billion in 2023/24 and $5.7 billion in 2024/ 25.
“This is a rare feat given the magnitude of the COVID-19 shock,” analyst Martin Foo wrote.
The race to black ink follows the 2020/21 budget, where state finances were in surplus to the tune of $5.6 billion.
Mr McGowan will present the budget in a speech to Parliament on Thursday afternoon.