At last, the budget battle lines are drawn

The Shadow Treasurer Dr Steve Thomas says that today’s pre-budget media drop by the Premier and Treasurer Mark McGowan is an example of the Government’s spin machine in action and has pinpointed where the budget debate will be focussed.

“This is a pre-budget drop that seeks to spin the fiscal story into a Mark McGowan fairy tale” Dr Thomas said. “It needs to be viewed through the filter of fact and substance before anyone should give it any credit.”

One laughable line in the release says More than $4.4 billion already spent on pandemic response by the end of 2020-21”.

“That line sounds credible to the untrained, but they need to know that the McGowan Government had already received an extra $4 billion dollars above the budget by the end of the 2019-20 financial year thanks to the current iron ore boom” Dr Thomas said. “At the end of the 2020-21 financial year which finished two months ago we can expect to add another $4 to $5 billion to that.”

“Which means the apparently generous $9 billion Government COVID package including the new $1 billion announced in the paper today has already been paid for by the iron ore royalty boom even though it will still take years to roll out.”

“Frankly I am tired of the Labor Party rehashing old announcements as though they have had to put their hands into their pockets” Dr Thomas said. “Every other jurisdiction in the country has had to use debt to fund their COVID responses while in WA it is paid for in advance by the royalty cash rolling in.”

The massive increase in state revenue is attributed to:

  1. the high iron ore price resulting in massive iron ore royalties – to an expected peak of nearly$11 billion in 2020-21 which is double the amount expected in a normal price year,
  2. higher general taxes, including stamp duty that is likely up by half a billion dollars in 2020-21, and
  3. the GST fix put in place by the Federal Government which added $1.5 billion to the state coffers last financial year and $1.85 billion this year.

“On the revenue side the Labor Government has been the beneficiary of the biggest cash boom in our history, but you have to ask how well the community has benefitted from this boom which commenced two and a half years ago and is still going today” Dr Thomas said.

“How can we have a health crisis, a housing crisis and a skills crisis after thirty months of boom that has poured rivers of gold into Labor’s treasury and entirely paid for the COVID costs in advance?”

“The embarrassment of income riches Mark McGowan has received belongs to the community and should not be focussed on his own political fortunes” Dr Thomas said. “He has been rolling in his mountain of cash like Scrooge McDuck in his money bin for years, and now expects adulation for releasing some of it into the community.”

“Perhaps if COVID is the focus of his budget he might consider proper and adequate compensation for all small businesses impacted by his sudden shutdowns by creating a standard procedure for the circumstance”.

“There are plenty of small business struggling still while he gloats about his wealth.”