❓ Mr. Wyatt questions the Treasurer about the timing and necessity of the Loan Bill 2016, citing concerns about funding essential services. The Treasurer explains the bill's purpose, the reasons for the delay in its introduction, and the impact of revenue decline.
AnsweredQoN 666Legislative Assembly
QuestionView source ↗
LOAN BILL 2016 — PASSAGE
666. Mr B.S. WYATT to the Treasurer:
I refer to the Loan Bill 2016, which
is required to pass by the end of October, so that police, nurses, teachers and
essential services can be paid.
(1) Is this the
first time in the state's history that the state requires an urgent
loan bill to ensure that our teachers, nurses and police officers will be paid?
(2) Why did the
Treasurer wait till the last sitting day of August to introduce this
legislation, given that he knew at the time of the state budget that this Loan
Bill would be required?
666. Mr B.S. WYATT to the Treasurer:
I refer to the Loan Bill 2016, which
is required to pass by the end of October, so that police, nurses, teachers and
essential services can be paid.
(1) Is this the
first time in the state's history that the state requires an urgent
loan bill to ensure that our teachers, nurses and police officers will be paid?
(2) Why did the
Treasurer wait till the last sitting day of August to introduce this
legislation, given that he knew at the time of the state budget that this Loan
Bill would be required?
AnswerView source ↗
(1)–(2) We
will no doubt start the debate on the Loan Bill tomorrow, so it has not been
brought on urgently. We have dealt with loan bills before that, if they had not
been passed, would have eventually led to us running out of money. When we are
running a deficit, we have to borrow money to fit the deficit. Back in 2015 we
passed a loan bill for $8 billion, and the advice from Treasury at the time was
that that was more than adequate to suffice for at least this term of
government, until 1 July 2017. However, since then, in both the midyear review
and the budget, we have seen an unprecedented collapse of revenue in iron ore
royalties, goods and services tax, and across the board. It was a $9.2 billion
drop in revenue relative to what we expected. That is a large amount of money.
It is about one-third of our total revenue in one year. Despite achieving
efficiencies of $2.6 billion, there is still a gap. To fill that gap we are
increasing our borrowings, and we need to increase our loan bill. I make it
clear that, in the last budget we flagged that we would have to undertake the
borrowing. The Loan Bill does not increase the forecast borrowing that was outlined
in the budget. It is an administrative thing that caps the total general
consolidated borrowing, I think at about $21 billion, and we need to get
permission through a loan bill to exceed that, and that is what we are doing.
The question was: why did we not
bring it on earlier?
Mr
B.S. Wyatt : At the time of the budget.
Dr
M.D. NAHAN : Or after, or thereabouts. There were a couple of reasons. We
were waiting for the result for 2015–16 to get a good figure for that.
We will bring out the 2015–16 results next week and the statement of
state finances. We achieved a substantial reduction in overall borrowings, as
the member will see, but the deficit was more or less on track. In the previous
year, if my memory serves me correctly, we saw a very sharp drop in our deficit
for relative forecasts; this time we do not see it. We waited to see and to get
a good indication of what the 2015–16 result was, to indicate what the
loan bill needed to be, or whether we needed it to be a loan bill. We were also
working on Bell Group and other things that did not come to pass, which
indicated that we needed a loan bill, so we brought it out at this time.
will no doubt start the debate on the Loan Bill tomorrow, so it has not been
brought on urgently. We have dealt with loan bills before that, if they had not
been passed, would have eventually led to us running out of money. When we are
running a deficit, we have to borrow money to fit the deficit. Back in 2015 we
passed a loan bill for $8 billion, and the advice from Treasury at the time was
that that was more than adequate to suffice for at least this term of
government, until 1 July 2017. However, since then, in both the midyear review
and the budget, we have seen an unprecedented collapse of revenue in iron ore
royalties, goods and services tax, and across the board. It was a $9.2 billion
drop in revenue relative to what we expected. That is a large amount of money.
It is about one-third of our total revenue in one year. Despite achieving
efficiencies of $2.6 billion, there is still a gap. To fill that gap we are
increasing our borrowings, and we need to increase our loan bill. I make it
clear that, in the last budget we flagged that we would have to undertake the
borrowing. The Loan Bill does not increase the forecast borrowing that was outlined
in the budget. It is an administrative thing that caps the total general
consolidated borrowing, I think at about $21 billion, and we need to get
permission through a loan bill to exceed that, and that is what we are doing.
The question was: why did we not
bring it on earlier?
Mr
B.S. Wyatt : At the time of the budget.
Dr
M.D. NAHAN : Or after, or thereabouts. There were a couple of reasons. We
were waiting for the result for 2015–16 to get a good figure for that.
We will bring out the 2015–16 results next week and the statement of
state finances. We achieved a substantial reduction in overall borrowings, as
the member will see, but the deficit was more or less on track. In the previous
year, if my memory serves me correctly, we saw a very sharp drop in our deficit
for relative forecasts; this time we do not see it. We waited to see and to get
a good indication of what the 2015–16 result was, to indicate what the
loan bill needed to be, or whether we needed it to be a loan bill. We were also
working on Bell Group and other things that did not come to pass, which
indicated that we needed a loan bill, so we brought it out at this time.
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