Under-Treasurer Tim Marney has issued both sides of politics a stern warning that they must budget for and deliver bigger surpluses over the next four years to provide a buffer against volatile iron ore revenues and the Barnett Government's infrastructure-focused debt binge.
The volatility of State finances was underscored by revelations in yesterday's pre-election financial statement that the 2012-13 operating surplus has been revised upward by $101 million in just six weeks since December's mid-year financial review.
Treasury is now projecting a $241 million surplus in 2012-13 after a continued rally of the iron ore spot price, compared with a $140 million surplus at the mid-year review.
But Mr Marney warned the rally may not be sustained and stronger royalty collections over the forward estimates would result in a further diminution of WA's share of the national GST pool.
"Despite the improved outlook for royalty revenue, the operating surpluses forecast for 2012-13 and 2013-14 are small in the context of the State's revenue base, at just 0.9 per cent and 1.4 per cent of forecast general government revenue in 2012-13 and 2013-14 respectively," Mr Marney said.
Treasurer Troy Buswell hailed the "good set of numbers" but said they reinforced his view the election would be fought in a tight fiscal environment. Mr Buswell used the statement to accuse Labor of financial profligacy, claiming its promises to date - including Metronet, which Mr Buswell continues to insist will cost $6.4 billion despite Labor claiming it is half that - will add $8.2 billion to State debt over the next four years.He also admitted he did "not really" believe a Federal coalition government led by Tony Abbott would make any further progress on GST reform than the Gillard Government.
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