State fees up to find razor-thin surplus

Treasurer Mike Nahan has delivered a razor-thin surplus of $175 million while hiking Government fees and charges by 6.6 per cent, or $324 a year for the average family.

Describing his first State Budget as a response to WA’s changing economic circumstances, Dr Nahan’s financial plan relies on very optimistic projections about controlling the increase of the Government’s spending.

Dr Nahan insisted his plan to curb spending growth to 2.6 per cent, compared to last year’s runaway result of 9.1 per cent result, was realistic.

“It is a necessary figure and it is a credible one,” he said.

DUMPING FEES SKYROCKET | $60m FOR COUNCIL MERGERS | HOUSEHOLDS TO BE SLUGGED | TOUGH LAWS LOST IN POLICE BUDGET | HIT FOR MOTORISTS, COMMUTERS | HEALTH GETS $447m TOP UP | PRIVATE SECTOR TO BUILD SCHOOLS | LITTLE JOY IN ARTS

Power prices will rise 4.5 per cent, water prices will rise 6 per cent and motor vehicle registration will rise 3 per cent, plus the $39 private concession will be abolished.

Public transport fares will rise 4 per cent for a two zone adult fare and the student fare will increase 10c to 60c.

Debt will hit $24.9 billion in 2014-15 and increases in every out year to $29.4 billion by 2017-18.

The Budget announces big changes to the approach to Royalties for Regions, with a new $1 billion a year spending limit placed upon the fund.

The effect of the changes mean the R4R fund’s $1 billion balance cap will be breached for the first time, with $415 million of royalties flowing back to consolidated revenue in 2014-15, rising to $3.1 billion over four years.

VIDEO:Budget reaction from Premier/Opposition leader

It also mean’s R4R headline figure of 25c in every dollar of royalties will fall to 12.3c in the dollar by 2016-17.

The Government’s vaunted program of asset sales has failed to deliver any revenue in this Budget, with the Treasurer going no further than announcing a list of assets that could be sold.

Those assets include land at Princess Margaret, Swan, Shenton Park and Royal Perth hospitals, Utah Point port, the Kwinana Bulk Terminal, the TAB, the Perth Market Authority and some electricity assets.

The Budget contains a number of revenue grabs, including a $365 per bay increase in the Perth Parking Levy, expected to raise $73 million which will go towards the construction of the underground Wellington Street busport.

Land tax rates have been hiked 10 per cent across the board, raising $79 million, and the Government has ripped a $93 million “interim dividend” from its port authorities.

As foreshadowed by The West Australian, first homebuyers will be slugged, with the house price threshold for stamp duty exemptions dropped from $500,000 to $430,000. The measure will raise $54 million in the coming year and more than $220 million over the forward estimates.

The landfill levy, charged per tonne of dumped waste, has doubled for household waste and more than quadrupled for building site waste – raising $202 million over four years.

Agency procurement budgets have been slashed by 15 per cent, and agency asset investment budgets have been slashed by 5 per cent a year.

The Budget slashes the Government’s infrastructure spending by $3 billion over the forward estimates compare to last year’s Budget.

Dr Nahan’s biggest challenge is to contain the public sector wage bill. He has implemented a tough new element to the Government’s wages policy, an edict to agencies that their total spending on wages cannot grow by more than CPI.

Dr Nahan denied this would lead to job cuts, but the Government’s new Workforce Reform Bill, which passed Parliament last night, empowers public sector chiefs to enforce involuntary redundancies for the first time.

Illustrating the scale of the challenge, the Government’s wage bill has grown an average 8.1 per cent each year it has been in power, compared to 4.9 in NSW, 6.3 in Victoria and 6.4 in Qld. Dr Nahan now hopes to reduce it to 2.75 per cent.

“We have to do it to achieve our expense targets … and to deliver better and more effective services,” he said. “We have to start living within our means, even if they are diminished.”

The size of subsidies to the electricity sector continues to balloon and is protected to tally $2.5 billion over the next four years.

Dr Nahan announced a tariff review.

The Government investment in infrastructure has now peaked as a number of hospital projects, including Fiona Stanley, reach their conclusion. Spending on infrastructure is expected to fall to $5.3 billion in 2015-16, $2 billion lower then 2013-14.

Health spending will reach $8 billion for the first time this year. Dr Nahan said Health Minister Kim Hames had a lot of work to do to get the cost of hospital procedures, which are currently 8 per cent above the national average, down to par over the next 4 years.

Education funding will increase 4.3 per cent and the Government will introduce using public-private partnerships to build and maintain new schools.

Training fees will continue to rise, with students expected to meet on average 19 per cent of the cost of their course compared to 7 per cent presently.

Police funding will increase 6.6 per cent, including $25.4 million for upgrade of its computer-aided despatch system.