State 'can't afford big projects'
The State's business lobby yesterday accused the Government of ignoring repeated warnings to get its day-to-day expenditure in order and questioned whether major transport, sporting and civic infrastructure projects should go ahead.
Chamber of Commerce and Industry chief economist John Nicolaou said Standard & Poor's downgrading of WA's credit rating was a powerful symbolic message that the Government's financial management had to change.
"Over the last five years we have seen spending growth in the magnitude of 10 per cent per annum - that's simply not affordable," Mr Nicolaou said.
"The State election campaign became an infrastructure spendathon and we are concerned that particularly the rail projects are not what the State needs at this particular time, nor what the State can afford.
"We have had questions in relation to the airport line in particular but also the MAX light rail.
"These projects haven't gone through a formal assessment process to assess whether the costs of delivering these pieces of infrastructure outweigh the benefits.
"We need to understand what the economic (and) social benefits are from certain pieces of infrastructure, whether it be Elizabeth Quay or the football stadium."
Opposition Leader Mark McGowan told Parliament yesterday the Liberal-Nationals Government had "inherited a set of books probably the best in the State's history and converted them into the worst".
"It is an embarrassment. It is shameful that you have so badly mishandled the finances that this State - the envy of the nation, the envy of the world for its economic prowess - has now lost its triple-A credit rating," Mr McGowan said.
Shadow treasurer Ben Wyatt said the Premier's habit of dismissing negative projections in the Budget's forward estimates had been exposed as reckless.
"At no point since the member for Cottesloe became Premier has there been a consistent, rigorous process around the spending of public money," Mr Wyatt said.
"If you are not worried about where the State finances are heading, this is ultimately where you end up."
Treasurer Troy Buswell said the rating downgrade was a reality check for the Government itself and for the community.
"The reforms we have in line for our workforce, which will deliver the largest pool of savings out of the fiscal action plan, are going to be really tough," Mr Buswell said. "And if we think it's been difficult with education reform, we've got a whole other argument and battle coming around workforce reform. This should steel our resolve."
Former under-treasurer John Langoulant laid the blame for the credit rating downgrade at the feet of successive governments lacking the political courage to get day-to-day expenditure in order.
"It's called hard work," he said. "It's not politically attractive work but if you want to retain the triple-A credit rating, it's the work you've got to do."
RAC head of advocacy Matt Brown said the Government had to "keep WA moving" and now was not the time to shelve road and public transport commitments.
Chamber of Minerals and Energy chief executive Reg Howard-Smith said WA's finances had become increasingly reliant on mining royalties, which were 5 per cent of government revenue in 2003-04 but 21 per cent this year. Mr Howard-Smith urged the Government to use asset sales, public-private partnerships and deferment of capital expenditure to raise revenue, rather than increasing royalties.
Eric Ripper, Labor treasurer between 2001 and 2008, tweeted: "It must be a bittersweet day for Richard Court. The AAA which he won back is lost but the Bell case which he started is won."
