Outgoing under treasurer Michael Barnes has revealed a $2.7 billion revenue uptick in the state’s economic forward projections, driven by the flow-on effects of a weak Australian dollar.
Outgoing under treasurer Michael Barnes has revealed a $2.7 billion revenue uptick in the state’s economic forward projections, driven by the flow-on effects of a weak Australian dollar.
Compared with those in December’s mid-year review, the Treasury’s pre-election financial projections revealed a state revenue increase of $2.7 billion over four years to July 1, 2028.
The figure represents a 1.4 per cent revenue uptick over the forward estimates, offset partly by a 0.3 per cent increase to general government expenses – which increased $458 million, an increased labeled “modest” by Mr Barnes.
A weaker Australian dollar forecast lifted mining revenue projections by $831 million over the forward estimates.
The mid-year review was based on an exchange rate of US66c to the dollar, but this was revised downward to U64.4c as the dollar has weakened since as a result of signals coming from the US government under Donald Trump.
The state does not expect improvement in the exchange rate next financial year, predicting a further fall to US$63.3c – a figure which lessens the buying power of the local currency but increases the value of goods sold in USD markets, as most local exports are.
Marginally higher commodity price forecasts in iron ore and gold added $412 million to expected revenue from mining across the forward estimates.
Meanwhile, an upward revision by the federal government of the national GST pool lifted revenue by $729 million – in a move which highlights the value of the current distribution deal which will be reviewed next year.
Mr Barnes will leave his position as under treasurer later this year to take up a role as WA’s ‘chief fairness fighter, as debate over the current arrangement ramps up ahead of that review.
Another factor lifting revenue was a $212 million uptick in expected payroll tax between the mid-year review’s forward estimates and now.
That was driven by stronger than expected employment growth.
The unemployment rate has been revised down to 3.5 per cent in the latest Treasury numbers.
Payroll tax is a key election issue for business, and the WA government’s forward projections expect it to top $6 billion worth of revenue for the state next financial year.
Inflation projections were revised downward, to 2.75 per cent for the current financial year.
On the campaign trail ahead of next month’s election, Treasurer Rita Saffioti claimed the economic success as a win for the governing party.
“No other state in the nation has achieved what Western Australia has under WA Labor, with a triple-A credit rating from both Moody’s and S&P Global as well as six consecutive budget surpluses since 2018-19,” she said.
“Importantly, our strong surpluses have been maintained while investing record amounts in health, education, housing and homelessness and infrastructure, as well as providing record cost of living relief to Western Australian households.”
