Strive for long-term budget fix

15 February, 2017

Business has welcomed an improved short-term budget position but cautioned both parties that the future State Government must continue to rein in spending and sell key assets for long-term budget repair, says WA’s peak business advocate.

Chamber of Commerce and Industry of WA Chief Economist Rick Newnham says the pre-election Financial Projections Statement showed that restraint in budget expenditure growth should underpin all future government planning and asset sales must be a part of the long-term budget and debt repair agenda.

“No matter which party forms government next month, asset sales will need to be a key part of fixing the budget for the future,” he says.

He says while the short-term budget position has improved by $360 million, the announcement forecasts that WA will now not see a return to surplus in 2019-20.
“WA business community needs a strong plan back to surplus and the most sensible way to do this is through reducing spending and advancing a meaningful asset sales agenda,” he says.

“CCI has long called for the sale of any asset that does not need to be owned by the State – the partial sale of Western Power will reduce state debt by around $8 billion, create greater efficiencies for consumers, boost investment, take us one step closer to regaining the critical AAA credit rating and most importantly, will create thousands of new jobs for WA workers through recycling sale proceeds into new infrastructure via the $3 billion Next Generation fund.”

“It is important to note the short-term budget improvement is largely attributable to an uptick in the iron ore price – CCI has welcomed continued efforts by the current State Government to rein in spending and has welcomed a commitment from the Opposition to restrain growth in public sector wages, and would urge both parties to examine more ways in which Government can proactively bring the budget under control.”

“CCI also calls on both parties to commit to permanent payroll tax reform, to create nearly 900 jobs for workers by lifting the payroll tax threshold and helping WA small businesses succeed – payroll tax reform is a smart, targeted way to empower business to do what business does best, which is employ West Australians and stimulate the economy.” 

Tell the WA party leaders what you think about their strategies to fix the hole in the budget – submit a response on our Helping Business Work Map.