Western Australia has saved nation from further debt, says state Treasurer Ben Wyatt
‘Without Western Australia, I tell you what: that trillion-dollar debt is significantly larger,’ Ben Wyatt said.
West Australian Treasurer Ben Wyatt has hit back at federal criticism of his pandemic surplus, arguing the state remains by far the biggest contributor to the nation’s coffers.
Mr Wyatt handed down his fourth state budget on Thursday, outlining a forecast for general government surpluses through the next three years.
The surpluses have come under fire from Scott Morrison and Josh Frydenberg, who have called on the states to do all they can to stimulate the economy.
But speaking in Perth on Friday, Mr Wyatt said WA contributed more per person to the federal government each year than any other state and had helped keep federal debt from blowing out further.
“We continue in Western Australia to subsidise the commonwealth to the tune of $6600 per West Australian,” he said. “Without Western Australia, I tell you what: that trillion-dollar (federal) debt is significantly larger.”
The state’s surplus reflects soaring iron ore royalties and a hefty federal contribution as part of the GST reforms negotiated by Mr Wyatt and Premier Mark McGowan soon after they came to power in 2017.
Those GST top-up payments are expected to add more than $1.5bn to WA Treasury coffers this financial year and $1.8bn in financial year 2022. The state is expected to record surpluses of $1.2bn and $363m in each of those years.
The GST payments will mean WA will keep a minimum of 70c of every dollar in GST revenue it generates, unwinding the mechanism that previously saw the state’s share of the GST drop precipitously after any surge in iron ore prices.
The Prime Minister has called on WA and the other states to step up their spending as part of the COVID recovery, and on Friday said Mr McGowan should recognise the federal government’s role in generating WA’s budget surplus.
“The top-up payment, as a result of the GST reforms that the Finance Minister and I worked together on as treasurer, means that the Western Australian budget is in surplus,” he said. “And so, you’re welcome, Mark.”
WA opposition Treasury spokesman Dean Nalder said the state budget was “insipid”.
“The fact that WA Labor would run a surplus at a time when so many small businesses and households are suffering is appalling,” he said.
The government argues that the surplus will leave the state ready in the event of a Victorian-style second wave of the virus.
Modelling prepared by Treasury for Thursday’s budget forecast that another outbreak could cost the state’s economy $5.6bn and more than 30,000 jobs.
Mr McGowan on Friday said the surplus meant the state had the financial capacity to deal with any problems.
“We haven’t thrown everything out the door, because if you do and another wave comes the state will be in a very difficult position,” he said.
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