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Budget surplus under stress
The West Australian

The State Government's vaunted Budget surplus is under threat with questions over how agencies will meet efficiency cuts and key departments are set to ask Treasury for more money to cover "structural deficits".

With the predicted 2012-13 surplus already down from $196 million to $140 million in Troy Buswell's midyear review, it has emerged the departments of Planning, Transport, Fisheries and the Office of the Director of Public Prosecutions are projecting deficits and will need top-up funding.

The projections are on top of $55 million extra for schools, $85 million more for hospitals, $23 million for training places and $10.5 million for prisons in the review.

These are largely to fund unexpected growth in demand from WA's booming population.

Mr Buswell, the Treasurer and Transport Minister, yesterday played down the deficits, which Treasury identified in the midyear review as "spending risks".

He said they were minor compared with the funding injections and insisted frontline services would not be cut.

The Community and Public Sector Union said the bureaucracy had already been pared down by Labor and Liberal government cuts and there was little fat left to trim.

"It's not possible to cut further without impacting on services," secretary Toni Walkington said.

The Government has had two rounds of cuts this year.

There was a 2 per cent "efficiency dividend" for all departments (one per cent for Education) and a 2.5 per cent cut for government-owned corporations, designed to reduce debt by $4.9 billion over four years.

There were also "corrective measures" announced in September, including a hiring freeze, a ban on further accumulation of leave and an order to slash spending on travel, consultants, consumables and communications to save $334 million over four years.

Treasury said the Government clearly expected departments to deliver the cuts and, if not fully achieved, the surplus and net debt would deteriorate.

Shadow transport minister Ken Travers highlighted accounting changes and savings "tricks" in the midyear review and predicted the 2012-13 Budget would have a deficit.

An example was the accounting for public school buildings had changed to depreciation over 50 years instead of 40 to boost the Budget bottom line $37 million this year. Also, Landcorp would pay a one-off $62 million special dividend to the Government.

Mr Travers said some agencies clearly would not make their savings targets and were still negotiating with Treasury a month ago.

Mr Buswell, Planning Minister John Day and a Fisheries Department spokesman refused to give specific answers on their respective projected shortfalls.

Mr Buswell said an ongoing value for money review in Transport and Planning would identify further savings.