WA budget ‘headed back to substantial budget surplus’
WA Premier Mark McGowan has used today’s Committee for Economic Development of Australia WA State of the State event in Perth to reveal an expected return to budget surplus a year ahead of schedule.
And the Premier says the surplus – now slated for the 2019-20 financial year – won’t just be a case of “squeaking over the line”.
“It’s the first time Western Australia will be in surplus for six years,” Mr McGowan told a packed room at the Perth Exhibition and Convention Centre.
“This will be a substantial surplus in the hundreds of millions of dollars. And there will be a considerable surplus in out years as well.”
Mr McGowan and Treasurer Ben Wyatt partly attributed the improved forecast to increased austerity in government spending and a reduction in departments. “I don’t want to be Scrooge, but that’s my lot,” the Premier quipped – and suggested WA’s “GST fix” would account for only a small percentage of the turnaround.
Whatever the explanation, Mr McGowan’s announcement continues a bright run of economic indicators for WA after a much-publicised post-mining boom decline.
The news was warmly received by the CEDA crowd and by Chamber of Commerce and Industry WA chief economist Rick Newnham. The CCIWA had on Wednesday pointed to an increase in business investment, particularly in machinery in equipment, as signals businesses were positive about WA’s future.
Delivering a budget surplus 1 year early is a major achievement for the WA Government. As the Premier says, he has “the most fiscally disciplined cabinet in the country”. The GST deal certainly helps but it’s not possible without spending restraint. #wapol https://t.co/4L46ZhL3X7
— Rick Newnham (@RickNewnham) December 6, 2018
In late October, Standard and Poor’s upgraded the state’s credit outlook from negative to stable, giving rise to new hope that WA might regain the AAA credit rating it lost in 2013.
On the weekend it was revealed that WA was on the verge of a $75 billion mining construction boom that would include a green-lit $3.5 billion iron ore hub for Rio Tinto and multi-billion dollar projects from Fortescue Metals Group and BHP.
A once-in-a-lifetime opportunity also awaits the state in the new energy materials and battery sector, with electric vehicle sales globally predicted by Bloomberg NEF to hit 30 million in 2030.
WA has a rich supply of lithium and other new energy materials and there are forecasts the sector could be worth as much as $56 billion to the state if it can capture even 10 per cent of the associated electro-chemical production.
The battery supply chain, along with Indigenous-owned business were among nine clusters of economic opportunity for WA highlighted by Deloitte’s recently-released A new Way report.
In addition to the positive budget news, Mr McGowan also used the CEDA event to announce a $420 million expansion to the Keystart loan book.
WA Premier @MarkMcGowanMP announcing $420m expansion to government to Keystart loan book. “Most responsible way to support affordable entry to housing market for first time buyers”. #StateofWA @ceda_news #auspol pic.twitter.com/YPLwpCbYSZ
— Alan Duncan (@Alan_S_Dunc) December 6, 2018