Fiscal restraint and surplus plan welcomed by industry

09 March, 2017

Western Australian industry has welcomed the projected surplus released today by WA Labor which highlights that spending reviews and fiscal restraint should underpin all future budget and debt repair efforts.

Chamber of Commerce and Industry of Western Australia (CCI) Chief Economist Rick Newnham said WA Labor’s costings showed some significant, sensible savings measures that would be instrumental in budget repair should Labor win the state election – but asset sales must be a part of any future government’s financial strategy.

“The WA business community has welcomed WA Labor’s savings measures and the approach to spreading capital spend out over time, given WA’s significant debt,” Mr Newnham said.

“Reducing spending, streamlining services and reviewing every area of expenditure are all critical to fixing the deficit and state debt, to boost investment and take WA closer to regaining the critical AAA credit rating – however, business has warned that this will not be enough on its own, and which ever party forms the next State Government must sell assets to improve Western Australia’s financial position.

“However business remains concerned about WA Labor’s Debt Reduction Account which only funds debt reduction when iron ore is at $85 per tonne and WA’s GST share is at least 65 cents in the dollar –  these conditions have only been met twice in the past 17 years, so business looks forward to hearing Labor’s other debt reduction plans.

“WA Labor has identified they can reduce debt by $1 billion by 2019-20, so business encourages Labor to outline how they will pay down the remaining $40 billion.

“Business also notes Opposition Leader Mark McGowan’s commitment to ‘no new taxes on West Australians or increases in taxes on West Australians’ if Labor are elected on Saturday – this will be instrumental in ensuring the business community has the funds needed to grow and create jobs.

“Business has previously welcomed WA Labor’s commitment to linking public sector salaries to KPIs, eliminating waste and duplication across government departments and reducing the number of senior executive service positions – in difficult economic times business has to make tough decisions, so it is encouraging WA Labor is willing to do the same and bring some private sector efficiencies to the public sector.

“It is also good to see that Shadow Treasurer Ben Wyatt has committed to reviewing all areas of expenditure to identify areas where financial management can be improved – given the state’s financial position, there are no sacred cows of government spending and every single area of expenditure must be reviewed to ensure taxpayer dollars are being efficiently spent.

“WA Labor’s plans to develop a long-term infrastructure strategy via Infrastructure WA is also a commitment the WA business community welcomes, as it will deliver greater certainty for investors and create a more transparent and accountable spending culture related to state infrastructure and taxpayer dollars.

“CCI and the business community encourage WA Labor to deliver on today’s promise of fiscal discipline should they form the next State Government, and revisit asset sales as an efficient means of paying down state debt.”

Media contact: Kate Hodges – 0448 928 227