Treasurer Ben Wyatt today released the 2019-20 Annual Report on State Finances, which details Western Australia’s audited whole‑of‑government financial outcomes for 2019-20.
The report highlights the McGowan Government’s responsible Budget management had put the State in a strong financial position for the first nine months of the 2019-20 year, prior to the impact of COVID-19 in the June quarter.
Before the pandemic, net debt was around $9 billion lower in the March quarter 2020 than forecast when Liza Harvey and the Liberal-National Government left office.
Under the former Government, net debt increased on average by $2.9 billion per year to a forecast of over $43 billion.
The lower net debt outcomes under the McGowan Government have cut interest costs by almost $1 billion over the three years to 2019-20, underlining the importance of Budget repair in helping to bolster WA’s COVID-19 response.
The McGowan Government is investing $5.5 billion in the WA Recovery Plan to help drive WA’s economic and social recovery across different sectors throughout the State, to ensure we can recover, stronger than ever.
The 2019-20 Annual Report on State Finances report shows a fall in general government revenue and an increase in recurrent spending that is mainly due to the pandemic, including significant investment in frontline services and support measures for households and businesses. This has significantly reduced the forecast surplus for 2019-20 and increased net debt.
The $2.6 billion general government operating surplus forecast in the Mid-year Review has been reduced by $920 million to $1.7 billion.
Total public sector net debt increased to $35.4 billion at June 30, 2020, up from $34.5 billion at March 31, 2020.
Last financial year, the McGowan Government spent $5.2 billion on infrastructure, with major investment in roads and public transport ($1.9 billion), electricity ($971 million), water ($635 million), and schools ($428 million).
More details about the State’s finances will be available in the Budget to be released on October 8, 2020.
As stated by Treasurer Ben Wyatt:
“This report shows the McGowan Government’s responsible financial management had dramatically improved the State’s financial position, after almost a decade of mismanagement under Liza Harvey and the previous Liberal-National Government.
“Even though the financial impact of COVID-19 came in the final months of this report, it vindicates our efforts for Budget repair and highlights the value of preparing for economic shocks.
“Given the significant impact of COVID‑19, the Government is now shifting its focus from reducing net debt to supporting our economy.
“The full impact of COVID-19 on the State’s finances will take some time to be captured as the economic impacts continue to be felt and the Government continues to fund the State’s recovery.
“Every cent of the surplus achieved in 2019-20 has been allocated to the Asset Investment Program to fund projects that support and create local jobs.
“The priority in a COVID world is not driving down net debt – the priority is Western Australians and the State’s economic future.
“Next month’s Budget will contain further initiatives to support our recovery from COVID-19.”