What to look for in the Mid-year Review

Dec 14, 2022 | State News, Steve Thomas MLC

The Shadow Treasurer Dr Steve Thomas says that the impending release of the Mid-year Review will show that state revenues are holding up despite the change in rhetoric from the Premier, who seems to be trying to scare the community about the fiscal future.

“I expect the Mid-year Review to be released in the next few days, perhaps as early as tomorrow, and it will reflect higher iron ore royalties and state taxes than predicted in the May budget” Dr Thomas said. “It will show that State Government revenue remains high enough for the Government to assist those West Australians that are struggling with eight interest rate rises in a row this year, and to provide better services in areas such as health, despite the Premier’s commentary.”

“The Premier keeps warning us all of impending recession around the world in order to dampen down demands that he spend his amassed riches from multiple $6 billion surpluses on the needs of the community today and to provide better services, instead of saving it for his own pet projects and election sweeteners to ensure his political future.”

“The May budget predicted an iron ore price of US$77.50 this year, but it actually averaged US$103.50 in the first three months, and it is US$109 dollars today.”

“That has added $1 billion to the Government’s income in the first half of this financial year already and should boost the predicted $1.5 billion surplus by at least that much” Dr Thomas said. “If the Mid-year Review reflects only the first half of the year the current surplus should push up to $2.5 billion.”

“If the iron price stays up for the full year Mr McGowan is looking at an extra $2 billion in revenue, which would push his next surplus out to $3.5 billion. That is not an insignificant amount!”

“In addition, the May budget estimated an exchange rate of 75 cents, but the Australian dollar has traded well below that, again boosting revenue.”

Dr Thomas said that Mr McGowan is quite deliberately overstating the downside economic risk to Western Australia so that he can keep his billions as free money in his money bin for his own political agenda. He said the community should be wary of the Premier’s agenda.

“While it is true that world economic growth is expected to decline, most commentators including the ratings agencies are predicting a soft landing here in WA. This is based on a surprisingly resilient iron ore price and the GST fix, plus a strong local economy.”

“And increased state taxes, especially payroll tax, have boosted Mark McGowan’s pile of cash even more. If the Premier doesn’t want to give any of his cash back, he could instead take his hand out of people’s pockets by reforming our clumsy tax system, especially payroll tax and stamp duties.”

“The pressure is on the Premier to share the wealth with the people and the community, but in true Scrooge McDuck style he is intent on keeping it for his own benefit, and is trying to scare us all with threats of recession interstate and overseas into supporting him in doing so.”