December 20, 2017
McGowan Government to deliver record deficit
· Record deficit of $2.6 billion in 2017/18, up $265 million since the State Budget
· Record debt of $42.8 billion in 2020/21
· Government spending up $214 million over forward estimates
· Revenue to government up $782 million over forward estimates
The McGowan Government is on track to deliver the largest deficit in the history of the State.
Shadow Treasurer Dean Nalder said today’s Mid-Year Review from the McGowan Government delivered record debt and deficit due to accelerating Government spending and despite an increase in revenue flowing into the Government’s coffers.
“The Labor Government was elected on a platform of fixing the State’s finances and instead they have delivered a significant deterioration,” Mr Nalder said.
“This deficit has occurred under the McGowan Government’s financial decision-making and they have no-one to blame other than themselves.”
In addition to record deficit, the McGowan Government is delivering record debt, including borrowing nearly $5 billion in its first year in Government.
“At the election, the McGowan Government promised that debt would peak at $40.0 billion* however it is now forecast to increase $42.8 billion,” Mr Nalder said.
“This is proof positive that the McGowan Government has no ability to reduce debt as promised at the election.
“This debt number also makes no provisions for Metronet, capital-intensive hospital upgrades and a range of other election commitments.”
Government Spending Up
The record deficit is being driven by increased Government spending which has increased by $214 million over the forward estimates.
“Despite the rhetoric about cutting Government spending it has actually increased under the McGowan Government, and more concerning, it is accelerating,” Mr Nalder said.
“Chamber of Commerce and Industry Chief Economist Rick Newnham has shown the McGowan Government to be the highest spending State Government in the nation.”
No Excuses – Revenue Flowing to Government Up
Mr Nalder said the fact that the Government was in line for a windfall revenue gain of $782 million over forward estimates made its financial mismanagement even more stark.
“This windfall includes, iron ore royalties up $483 million, payroll tax up $96 million and $141 million from other royalties over forward estimates,” Mr Nalder said.
“Revenue is up $780 million so to blame the gold tax disallowance is simply disingenuous and goes to the integrity of Mark McGowan.
“The McGowan Government has no excuses for their increased Government spending, record debt and record deficit.”
*Due to rounding the actual amount is $39.975 billion