Budget debt binge
The Barnett Government will borrow billions of dollars to build big-ticket road and rail transport projects in a tax-and-spend State Budget to be delivered by Treasurer Troy Buswell today.
The Budget will formally commit the Government to its “big three” transport projects promised during this year’s election campaign — the $2 billion airport rail line, the $1.9 billion MAX light-rail system and the $845 million Swan Valley bypass road dubbed as the Perth-Darwin Highway — with each to begin construction in 2016.
But the rail projects will not be completed until 2019, a year later than the Government promised during the election campaign, which the Labor Opposition will brand “a massive broken promise”.
The Government will invest a record $5.7 billion in transport infrastructure over the next four years.
Mr Buswell will deliver a modest Budget surplus today, much smaller than the $500 million-plus surpluses Under-Treasurer Tim Marney warned in February were necessary to begin to pay down debt and shield the State’s finances from their increasing reliance on volatile mining revenues.
The Treasurer admitted State debt would continue to climb for at least the next four years and acknowledged his financial plan would be closely scrutinised by credit ratings agencies, which have put WA on a “negative watch” amid concerns about rising debt and volatile revenue.
Premier Colin Barnett admitted the Budget would contain tax rises and cuts to some programs.
The Budget will direct significant money towards the Government’s promised reforms of public sector employment arrangements, changes Mr Buswell insists will buttress the State’s bottom line in the medium term.
He will sell the Budget around four key themes: investing in infrastructure, community safety, efficient delivery of services and protecting WA’s economy by reforming the public sector.
“This Budget will be defined as the transport Budget,” he told The West Australian yesterday. “It brings to book the Government’s response — and I think it’s a considered response — to the pressure the people of Perth are feeling on the roads, in the trains and on the buses, from a growing population.”
Significantly, the Government will commit to each of the “big three” transport projects despite receiving only a fraction of the Commonwealth funding its election funding plan assumed.
The Government had banked on $2.5 billion of Commonwealth funding for the rail projects but the Budget will assume that no more than $500 million, committed by then-Federal treasurer Wayne Swan in May, will come from Canberra.
Mr Buswell said the balance of $3.4 billion would be funded by more borrowings.
“However, we reasonably expect that more money will come from the Commonwealth for those projects and that there will definitely be private sector participation in those projects,” he said.
The Budget will commit the Government to smaller transport projects promised during the campaign, including the $47 million multistorey carpark at Edgewater train station and upgrades to the Coalfields Road and Albany Highway.
It will commit the Government to transport projects outlined in Federal Labor’s Nation Building Plan.
This includes upgrades to the Great Northern Highway from Muchea to Wubin, High Street-Leach Highway in Fremantle and the North West Coastal Highway.
Much of the required spending to build all the projects will be beyond 2016-17, the final “out year” of the Budget.
Shadow treasurer Ben Wyatt said any tax rises would represent a fundamental failure of financial management by the Premier and the Treasurer.
“Colin Barnett now gets $6 billion a year in revenue more than he did when he was first elected,” Mr Wyatt said.
“The problem is not the revenue, the problem is that Colin Barnett has not been able to control his own spending.”
