The Chamber of Commerce and Industry WA has congratulated the State Government for maintaining its discipline in spending but urged further budget repair through asset sales.
The financial results for the first six months of 2017-18 have shown an improvement of $744 million compared to the same period a year earlier.
CCI Chief Economist Rick Newnham said today’s update is welcome news for the WA business community that the State’s finances are being put back on a more sustainable footing.
“CCI has long highlighted that the WA Government has a spending problem, not a revenue problem,” Newnham says.
“Some major external factors have contributed to the State’s finances, namely rallying commodity prices and an upgrade to the national pool of GST, which has given WA an extra $124 million.
“The Government can be congratulated for showing continued restraint in wages growth, particularly in the health sector.
“Public sector wages are the single biggest area of government expenditure (45 per cent), so it is vital that the government is able to better control wage growth to repair the State’s finances.
“Even though we are optimistic about the future of the WA economy, the decrease in taxation revenue in today’s update highlights the ongoing fragility of WA’s economy and the need for the State Government to provide a stable investment climate.
“Improvements in the budget should not give way to complacency. We urge the State Government to keep its focus on reducing spending and to not introduce new or increased taxes, fees or charges.
“This is an opportunity for the Government to assess the ownership of all State-owned assets, which has the potential to wipe billions of dollars off State debt while increasing productivity by accelerating infrastructure development.
“The adoption of technology to improve service delivery while reducing costs must also be prioritised, in line with the recommendations of the Government’s Service Priority Review.”
While CCI welcomes the increase in revenue from GST there remains an urgent need to fix the GST distribution.
“Australia’s GST system should be one that encourages every state government to forge ahead and develop their own economy, and to pursue tax reforms that stimulate growth and increase the size of the GST pie, benefiting every Australian,” Newnham says.
“CCI will continue to advocate for a change to the GST distribution that is in the national interest.”
► As WA’s peak business advocate, CCI works to elevate the concerns of WA industry to key nationwide decision-makers. Find out more about our advocacy efforts here.