NET DEBT — 2022–23
STATE BUDGET
299. Ms M.J. DAVIES to the Premier:
Noting that the Premier's
government has been gifted $11 billion-plus in surpluses over the last two
years on the back of record growth —
Several members interjected.
The SPEAKER: Order, please! I
would like to hear the question in silence.
Ms R. Saffioti interjected.
The SPEAKER: Sorry, Minister
for Transport, I just said I would like to hear it in silence.
Ms M.J. DAVIES: Thank you,
Madam Speaker.
Noting that the Premier's
government has been gifted $11 billion-plus in surpluses over the last two
years on the back of record royalties and the GST flow delivered by the
coalition government —
Several members interjected.
The SPEAKER: Members, can you
just rest assured that the Premier is capable of answering the question
himself. He needs no assistance from any of you.
Ms M.J. DAVIES: Thank you,
Madam Speaker.
Given the Premier's forward
estimates forecasts another $10.9 billion over and above the $11 billion of the
last two years, can he explain why debt will continue to rise when he promised
to pay it down?
Mr M. McGOWAN replied:
This year's budget is the
third budget in a row that we have paid down debt. When we arrived in office in
2017, the forward estimates under the previous government had debt in Western Australia
heading towards $44 billion. Over its term
in office from 2008 to 2017, it grew from around $5 billion to mid-$30 billion,
climbing to $44 billion. That was the trajectory. What happened during
its time in office? It had seven Treasurers. Seven people occupied the role of
Treasurer during its time in office. Admittedly, one of them did it three
times.
I will just give members a bit of a recap
of history. The former government went to the most optimistic forecast of revenue. With its revenue forecast, particularly
around iron ore, which delivers royalties, it put in the most optimistic
forecasts that it possibly could, and then it spent accordingly. Not only that,
in the 2013 budget, Christian Porter, then Treasurer, put in an assumption that
the GST would be fixed, and therefore spent up to that level. That was actually
in the budget papers because it was all assumed it would happen, even though,
since it was put in place in 1999 by the Liberal–National government,
that fix, if you like, had never been achieved. Therefore, the former
government spent accordingly. What happened? Debt went out of control. Deficits
were out of control. When we came to office, we said we would do a number of
things. First, we would budget conservatively. Second, we would ensure that we
got our recurrent spend under control. We did both of those things. We reduced
the recurrent spend from around 6.3 per cent per annum down to around two per
cent per annum, including our election commitments. We did those two things at
once. It was never done by the Liberals and Nationals when in office because
they had no control of spending, they did not believe in it and anyway, and
they had two budget processes: they had a Liberal budget process and a National
budget process, which explains a bit of what is going on in the current
government in Canberra as well. There is no control because the National Party
does not work as a team with the Liberal Party. That is what occurred. We got
spending under control.
After my conversations with Malcolm
Turnbull, I got the phone call. I was standing in a car park in Derby, saying, ''We have to repair the GST'', which
would never have occurred but for the election of this government. For eight and
a half years, Colin Barnett talked about it and budgeted for it, and nothing
happened. Then the election of this government
took place and suddenly all the wheels went into motion over east: ''What
can we do to help Mark? How do we sort
this out?'' They were the phone calls. We went over there. Malcolm
Turnbull said, ''We're not an ATM, you know'', and
then he was handed over billions of dollars. That is what happened. The
election of this government secured that. Mathias was great in helping to
secure that.
A third thing occurred. This is very
important. Obviously, over the last two years while iron ore prices have risen
at times to $US150 to $US155 a tonne, we kept the industry open. That is not an
insignificant achievement. We kept the industry open when it shut down in large
parts of the world. What happened?
Dr D.J. Honey interjected.
Mr M. McGOWAN: Honestly, you
would not have a clue, mate.
Dr D.J. Honey interjected.
The SPEAKER: Member for
Cottesloe, you have not asked this question. I am asking you to stop
interjecting.
Mr M. McGOWAN: He is the only
Leader of the Liberal Party I have ever seen who does not respond to the
budget. On the day of the budget, the Leader of the Liberal Party did not go
out and respond. They hide him inside. They hide him in the building. They have
a cupboard in the opposition leader's office. They shoved him in there,
gave him a dummy and left him in there.
We
kept the industry functioning without interruption from COVID. Over the course
of those two years, whilst royalty receipts were high, that obviously
helped us to improve the state's bottom line. That is what we did.
Against the opposition's criticism
and against the Liberal Party and its friend Clive Palmer, we did all those
things. That secured a strong outcome for the state. When the Leader of
the Opposition said we had $11 billion worth of surpluses, we also spent $11 billion on the COVID response. Not
only did we secure greater revenue, but we also spent $11 billion on a whole
range of initiatives to respond to COVID, and we are still paying down debt. Why
do the forward estimates have a slight increase in debt? We paid down debt for
the last three years. We have now got it below $30 billion this financial year.
It is relatively stable across the forward estimates and then it ticks up
slightly. Why does it tick up slightly? It is because we have extremely
conservative estimates of revenue. That is why. We assume that we spend all our
asset investment program. Why do we do that? It is because we do not want to do
what the former government and Christian Porter did, whereby they put in
optimistic assumptions, they spent accordingly and the finances went out of
control. When we arrived in office, we had the worst set of finances of any
government in Australia. Today we have the best.