❓ Shadow Treasurer Wyatt questions the Treasurer about the increasing state net debt, contrasting it with previous projections. The Treasurer defends the debt by citing capital works programs and revenue uncertainty, without directly answering the question.
AnsweredQoN 330Legislative Assembly
QuestionView source ↗
STATE
BUDGET 2014–15 — NET DEBT
330. Mr B.S. WYATT to the
Treasurer:
I refer to the Barnett government's
2012 budget, just two years ago, when then Treasurer Christian Porter stated
that net debt would be peaking in 2014–15 at $23 billion, and then
commencing its reduction in the final out year 2015–16. I refer also to
the current Treasurer's budget and the year that net debt was due to
peak at $23 billion that now has net debt at $24.9 billion and increases over
the forward estimates to nearly $30 billion. In what year will net debt peak,
and at what level?
BUDGET 2014–15 — NET DEBT
330. Mr B.S. WYATT to the
Treasurer:
I refer to the Barnett government's
2012 budget, just two years ago, when then Treasurer Christian Porter stated
that net debt would be peaking in 2014–15 at $23 billion, and then
commencing its reduction in the final out year 2015–16. I refer also to
the current Treasurer's budget and the year that net debt was due to
peak at $23 billion that now has net debt at $24.9 billion and increases over
the forward estimates to nearly $30 billion. In what year will net debt peak,
and at what level?
AnswerView source ↗
I thank the member for the question
and I accept his quotation from the 2012 budget from the Treasurer at the time.
Yes, this government has in both of its terms undertaken a massive capital
works program. All told, it was $35 billion last term and it will be $23 billion
this term over the forward estimates. It is $58 billion or thereabouts. We are
in the business of revitalising the state's asset base. Although we
have been able to maintain current account surpluses, they have been small and
most of the capital works program has been funded by debt. The question is: is
it too much? I argue that in our first term we undertook a massive
revitalisation and we went through the global financial crisis. We made
commitments and we met them. The member opposite overlooked a very important
event in this term, since 2012 and 2013—it is called a state election.
Both parties went to the election in 2013 with very large increases in
commitments to capital works. We did a range of those, we are undertaking those
and we are committing to them. This is where the debt is coming from. I might
add that, without question, debt would be higher under members opposite.
Several members interjected.
The
SPEAKER : Members!
Dr
M.D. NAHAN : It would have to be because they committed to almost everything
that we did, plus Metronet. Metronet would have added $5 billion to the debt.
In this budget, we are continuing to meet our capital works program as
committed to in 2013, and that is leading to increased debt. What are we doing
about the debt? Is the debt too high? As a percentage of revenue, no, it is
not.
Point of Order
Mr
B.S. WYATT : The Speaker may appreciate that my question was very
simple and direct. What year will net debt peak and at what level? I ask the
Speaker to bring the Treasurer back to the question and his answer.
Questions without Notice Resumed
Dr M.D. NAHAN : In
order to know where you are going, you have to know where you have been.
Several members interjected.
The SPEAKER :
Members! Member for West Swan!
Dr M.D. NAHAN : We are committing to a large capital works
program. The reason debt is too high is not because of its aggregate level; it
is just, as the Premier mentioned, our revenue uncertainty. That is the major
reason that we lost our credit rating.
Several members
interjected.
The SPEAKER : I call the Member for Butler to order for
the first time.
Dr M.D. NAHAN : Members opposite are, of course, experts
in credit rating and whatnot. What have we done? Last budget we announced a
fiscal action plan that stripped —
Mr B.S. Wyatt : Some come, some go.
The SPEAKER : Some come, some go; I call the member for
Victoria Park to order for the first time.
Dr M.D. NAHAN : The fiscal action plan stripped $1.89 billion
out of the costing budget and in this budget we announced another $2 billion.
We also announced an asset sales program that is not in the budget and is not
costed.
Mr W.J. Johnston : How much? They have announced it but it is
not in the budget!
The SPEAKER : I call the member for Cannington to order
for the first time. Can the minister bring this to a conclusion.
Dr M.D. NAHAN : Asset sales that have not yet been
identified in terms of value are not included in the budget. Maybe those
opposite do that, but we do not. When we obtain the sales, we will add them to
the budget and it will limit it. We will do that when we get the asset sales;
we will start reducing growth and cap the debt levels, as is appropriate.
and I accept his quotation from the 2012 budget from the Treasurer at the time.
Yes, this government has in both of its terms undertaken a massive capital
works program. All told, it was $35 billion last term and it will be $23 billion
this term over the forward estimates. It is $58 billion or thereabouts. We are
in the business of revitalising the state's asset base. Although we
have been able to maintain current account surpluses, they have been small and
most of the capital works program has been funded by debt. The question is: is
it too much? I argue that in our first term we undertook a massive
revitalisation and we went through the global financial crisis. We made
commitments and we met them. The member opposite overlooked a very important
event in this term, since 2012 and 2013—it is called a state election.
Both parties went to the election in 2013 with very large increases in
commitments to capital works. We did a range of those, we are undertaking those
and we are committing to them. This is where the debt is coming from. I might
add that, without question, debt would be higher under members opposite.
Several members interjected.
The
SPEAKER : Members!
Dr
M.D. NAHAN : It would have to be because they committed to almost everything
that we did, plus Metronet. Metronet would have added $5 billion to the debt.
In this budget, we are continuing to meet our capital works program as
committed to in 2013, and that is leading to increased debt. What are we doing
about the debt? Is the debt too high? As a percentage of revenue, no, it is
not.
Point of Order
Mr
B.S. WYATT : The Speaker may appreciate that my question was very
simple and direct. What year will net debt peak and at what level? I ask the
Speaker to bring the Treasurer back to the question and his answer.
Questions without Notice Resumed
Dr M.D. NAHAN : In
order to know where you are going, you have to know where you have been.
Several members interjected.
The SPEAKER :
Members! Member for West Swan!
Dr M.D. NAHAN : We are committing to a large capital works
program. The reason debt is too high is not because of its aggregate level; it
is just, as the Premier mentioned, our revenue uncertainty. That is the major
reason that we lost our credit rating.
Several members
interjected.
The SPEAKER : I call the Member for Butler to order for
the first time.
Dr M.D. NAHAN : Members opposite are, of course, experts
in credit rating and whatnot. What have we done? Last budget we announced a
fiscal action plan that stripped —
Mr B.S. Wyatt : Some come, some go.
The SPEAKER : Some come, some go; I call the member for
Victoria Park to order for the first time.
Dr M.D. NAHAN : The fiscal action plan stripped $1.89 billion
out of the costing budget and in this budget we announced another $2 billion.
We also announced an asset sales program that is not in the budget and is not
costed.
Mr W.J. Johnston : How much? They have announced it but it is
not in the budget!
The SPEAKER : I call the member for Cannington to order
for the first time. Can the minister bring this to a conclusion.
Dr M.D. NAHAN : Asset sales that have not yet been
identified in terms of value are not included in the budget. Maybe those
opposite do that, but we do not. When we obtain the sales, we will add them to
the budget and it will limit it. We will do that when we get the asset sales;
we will start reducing growth and cap the debt levels, as is appropriate.
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