Thumbs up for WA govt spending report

CCI has welcomed recommendations of the State Government’s special inquiry into the previous government’s spending to improve program and project outcomes for WA.

CCI Chief Executive Officer Chris Rodwell commended special inquirer John Langoulant AO for his comprehensive review. Langoulant, who was tasked with the inquiry last May, released his findings earlier this week.

“The Langoulant review should act as a blueprint for effective government decision making,” Rodwell says.

“The report’s findings highlight many concerns that the WA business community have raised over the past decade regarding the fiscal management of this state.

“CCI has long said that the state has a spending problem, not a revenue problem, and this spending must be reined in if we want to reduce net debt and regain our triple-A credit rating.

“The McGowan Government has made commendable efforts to return the government to pre-boom size, but WA still remains the highest spending state on a per-capita basis and the government must go further to bring us into line.”

Langoulant found issues with several of the previous State Government projects, including the Royalties for Regions program, and made recommendations to avoid mistakes in the future.

The McGowan Government has initiated an implementation team to deliver on the recommendations and findings handed down in the final report.

The recommendations of the special inquiry are broadly endorsed by the Government, with the exception that Royalties for Regions funding will remain and the $1 billion expenditure cap per year be retained.

Rodwell says changes to the Royalties for Regions program, announced in last year’s budget, will go a long way to address significant concerns CCI has raised for many years.

These include transparency, the need for a rigorous cost-benefit analysis, and the need for regional projects to be part of a broader plan for the state’s infrastructure needs and not assessed in isolation.

“Governments, like business, must make responsible financial decisions with proper business cases in hand. The Government must cut its spending, the same as business has done in recent years, to remain sustainable,” Rodwell says.

CCI welcomes the report’s findings that larger budget surpluses are needed when infrastructure spending is high and that the GST is not the cause of the WA government fiscal problem – this was foreseeable and the real cause was high government spending which must now be restrained.

Rodwell says the report’s recommendation to establish a Parliamentary Budget Office ahead of the next election is also a step in the right direction.

“A Parliamentary Budget Office will help increase transparency and build trust with the public and business,” he says.

“If there is one thing we should know about the WA economy by now, it is that booms do not last forever.

“This review should be a reminder for future WA governments to run surpluses, particularly during the boom, to prepare us for the inevitable rainy day.

“CCI urges the Government to consider the report’s recommendations in full, particularly those that align with the recommendations of the Service Priority Review, to enhance efficiencies and improve and modernise the transparency of government.”

►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.

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