Western Australia’s monster budget surpluses continue but clouds are gathering

Nov 26, 2021 | State News, Steve Thomas MLC

The Shadow Treasurer Dr Steve Thomas says that today’s release of the September 2021 Quarterly Financial Results Report has again highlighted the massive cash income the McGowan Government has received during the current financial boom.

“The incredible $5.8 billion surplus recorded for the 2020-21 financial year has today been added to with a $4.4 billion surplus for the first three months for the 2021-22 financial year” Dr Thomas said.

“Once again the Government can thank the iron ore boom ($1.1 billion higher than the same period last year), and the new GST deal thanks to the federal Coalition Government (up $1.1 billion to a total of $2.2 billion)”.

“Tax revenue was also a quarter of a billion dollars higher than the first quarter of last year” Dr Thomas said.

“Once again the McGowan Government has received a mountain on cash, and once again the Premier is falsely claiming the result as “strong budget management.”

Dr Thomas said that riding the boom times is not the same as delivering good economic management, and he is concerned that the boom is rapidly declining.

“The opportunity is already starting to wane” Dr Thomas said.”The iron ore spot price has already fallen below the level of the assumptions that underpin the state budget handed down just two months ago” Dr Thomas said. “The current price of around US$90 is less than half the May 2021 peak of US$235 per tonne, and the drop has occurred within just 6 months.”

“Importantly, the iron ore price has already dropped below the state budget iron ore assumption for the full 2021-22 financial year of US$121.30 per tonne.”

“The current once in a lifetime fiscal boom remains the biggest lost opportunity the state has ever seen and we are starting to see it come to an end” Dr Thomas said. “This has been a massive lost opportunity to set up this state for the future.”

“On the revenue side the Labor Government has been the beneficiary of the biggest boom in our history, but you have to ask how well the community has benefitted from this boom which commenced nearly three 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 three months of boom that has poured rivers of gold into Labor’s treasury.”