The 2021-22 Annual Report on State Finances has been released, containing the final audited outcomes of the State’s finances for the 2021-22 financial year.
A general government net operating surplus of $6 billion has been delivered, which is $344 million higher than projected at the 2022 23 Budget. The record outcome is the fourth consecutive net operating surplus delivered by the McGowan Government.
The better-than-expected outcome was due to expenditure being $576 million lower than forecast at Budget, which was partly offset by lower than forecast revenue collections, down $232 million, mainly due to lower royalty collections.
The net operating surplus provides a funding source for the State’s investment in infrastructure rather than increasing debt. Infrastructure investment totalled $7.2 billion in 2021-22, the biggest investment since 2012-13 and the second highest on record.
The stronger-than-expected surplus also helps position the State to deliver the improved wages offer for the public sector, which will now cost a total of $3.3 billion over four years.
Net debt has been reduced by $4.3 billion in 2021-22 to $29.2 billion, the largest ever decline in one year and a reduction for a third consecutive year. Net debt is now at the lowest level since 2014 15 and $14.5 billion, or one third, lower than the $43.7 billion projected when the McGowan Government came to office.
The State’s consistently strong financial performance has been recognised by S&P Global Ratings, which upgraded the State’s credit rating to triple-A (‘stable’ outlook) in June 2022.
As stated by Premier Mark McGowan:
“The State’s domestic economy, which has grown the most out of any State during the pandemic, has underpinned continued strong financial performance in 2021-22.
“We are using our strong financial position responsibly to address the challenges we face today and to set the State up for the future, including our response to COVID-19, massive spending in our health system, cost of living relief, improving public sector pay and conditions, addressing climate change, investing in social housing, a new women and babies hospital, remote communities, Westport and more.
“At the same time, we have reduced net debt for a third year in a row, down $4.3 billion to $29.2 billion in 2021-22, the largest ever reduction. The State’s debt is now $14.5 billion lower than expected when we came to Government.
“Reducing debt cuts the amount of interest we pay, which is important in the current environment, and provides financial capacity to respond to future challenges and for future generations.”