TREASURER — SYDNEY VISIT
369. Mr D.R. MICHAEL to the Treasurer:
I refer to the strong and
responsible financial management of the McGowan Labor government, which has
been praised by credit rating agencies and has delivered multiple upgrades to Western
Australia's credit rating. Can the Treasurer
update the house on his meetings with investors and credit rating agencies last
week in Sydney, and outline the response he has received?
Mr M.
McGOWAN replied:
I thank the member for the question.
Last
week I visited Sydney, principally to present to the state's investors—namely,
our bondholders. In addition to that,
I took the opportunity to meet with the credit rating agencies Standard and
Poor's and Moody's, the Governor of the Reserve Bank,
the federal Treasurer and the chief economist of ANZ bank. It would be fair to
say that the feedback from all of them on Western Australia's financial
and economic performance over the last five years was very positive. Because of
this performance, demand for our bonds is very strong. We are the only state in
Australia in which debt is going down; debt in other states is skyrocketing.
According to the recent state budget, our net debt has declined for the third
straight year, below $30 billion for the first time since 2015, and $14 billion—in
fact, one-third—lower than what was projected across the forward
estimates of the last Liberal–National government. That has saved us billions of dollars in interest
payments, which we can put towards better services and infrastructure.
Of course, as interest rates go up, this is an important thing; perhaps other
states should have followed Western Australia's example.
As we know, the previous Liberal–National
government lost our AAA credit rating in 2013. There were then multiple
downgrades in our credit ratings. The previous government recorded huge
deficits and rising debt over its term in office. Under my government, we have
seen multiple upgrades to our credit rating and outlook. The credit rating
agencies have been complimentary of Western Australia's performance
compared with domestic and global peers,
with Standard and Poor's saying that our budgetary and debt metrics are
materially stronger than those of
other states. We have very strong financial management and a robust track
record. I had an opportunity to present all that to the groups I mentioned
earlier, including the Reserve Bank, which, as I said, was very complimentary
of Western Australia's performance.
We are seeing a very different set
of circumstances in the eastern states compared with here. If we look at the
finances and debt trajectories of the eastern states in a high interest rate
environment, it is quite concerning. The New South Wales budget, brought down
yesterday, is another example of that. Another thing we are seeing that is very
concerning is its management of its electricity system. It sold off all its
electricity utilities, it does not have a reserve capacity mechanism in place
and it does not have a gas reservation policy in place. Those are three things
that Western Australia solved years ago, particularly during the government of
Alan Carpenter, which put in place the gas reservation policy that has helped
preserve the position of this state. Of course, the last Liberal–National
government wanted to sell off our
electricity utilities; that was its policy. As we have seen, particularly in
New South Wales and Victoria, that can have catastrophic consequences,
which are now going on over there.
The other thing, after electricity,
utilities and financial performance, is house prices. Over there, the house
price situation, particularly in the major cities, is very difficult for
ordinary families. The average price of a house in Sydney is twice that of
Perth. I do not understand how someone on a modest or low income can live in
Sydney. It is significantly better here, and
that should be, and is, a major attractor for people from over east or overseas
to come and live in Western Australia.
Finally, there is COVID. I was
sitting next to people at these events whose children did not go to school for
a year to 18 months. Their kids at university did not attend a lecture or
tutorial for two years. When I told them that our children had missed out on
around five or six days of school, they were agog. Since April 2020, we have
had 12 days' lockdown, while
Victoria had 250 days and New South Wales had 160 days of lockdown. The performance
in Western Australia —
Dr D.J. Honey interjected.
Mr M. McGOWAN: I am sorry; is
the member for Cottesloe objecting to this? I just heard some unfortunate
noises from over there.
They were agog at the performance of
Western Australia compared with the eastern states. We are on the right pathway. All those factors show that Western Australia
has achieved some great things, and that is because the people of this
state, under this Labor government, have been prepared to do the right thing.