WA Labor’s “Debt Dodging Strategy”?

14 February, 2017

WA industry is concerned a Labor Government would slug business with a tax hike to fund debt repair measures and has called on WA Labor to reveal more details about its “Debt Reduction Strategy”.

“The business community is concerned that Ben Wyatt’s Debt Reduction Strategy is in fact a Debt Dodging Strategy that will see Labor try to shift the burden of repaying government debt on to business in the form of higher taxes or charges for the private sector,” Chamber of Commerce and Industry of Western Australia (CCI) Chief Economist Rick Newnham said.

“So far we know that WA Labor’s Debt Reduction Strategy includes a flawed formula to quarantine iron ore royalties that is so complicated it actually won’t generate any revenue over the next four years."

“Ben Wyatt confirmed yesterday that this is just the ‘first in a series of initiatives WA Labor will introduce to direct revenue into the Debt Reduction Account’ so we want to know what his other plans are.

“We would be deeply concerned if Mr Wyatt intends to put his hand in the pocket of business to get some money into his empty Debt Reduction Account, particularly as last Saturday he reneged on his commitment not to raise taxes or introduce new fees and charges if he becomes the next state Treasurer.

"Business creates four out of five jobs in this state and anything that makes it harder for business to succeed will likely result in job losses – with WA’s unemployment rate still the second highest in the nation, whichever party forms the next State Government must recognise that empowering business to grow is the most efficient way to get West Australians back to work.”

Mr Newnham said analysis by CCI showed that Labor’s “Debt Reduction Account” would only receive money “once in a blue moon” when iron ore is at $85 per tonne and WA’s GST share is at least 65 cents in the dollar.

“This has only happened twice in the past 17 years and Treasury forecasts also show that this won’t happen at any point in the next four years,” Mr Newnham said.

“To Ben Wyatt, WA debt is not his problem – its iron ore’s problem, it’s the Commonwealth’s problem and industry is rightly concerned Mr Wyatt would seek to make state debt the business community’s problem too.

“It is time for WA Labor to stop playing the blame game, this will be their problem if they win so they need a responsible, government-centred plan to pay down the debt – a strong asset sales agenda should be the centrepiece of any budget repair efforts.

“CCI welcomes WA Labor’s commitments to reduce government spending and restructure the public sector but these reforms nowhere near equal the $8 billion that the partial sale of Western Power would generate – Mr Wyatt needs to get real about Western Australia’s financial position, commit to asset sales and seriously reconsider any budget strategy that would involve increasing costs for the business community.”

Media contact: Kate Hodges – 0448 928 227