❓ Opposition questions the Treasurer about potential credit rating downgrade due to slippage in fiscal action plan and workforce renewal policy. Treasurer acknowledges slippage but defends budget measures and expenditure control, expressing confidence in maintaining the AA+ rating.
AnsweredQoN 454Legislative Assembly
QuestionView source ↗
STATE BUDGET — CREDIT RATING
454. Mr B.S. WYATT to the Treasurer:
I refer to Moody's Investors
Service's recent decision on the state government's credit
rating, and that Standard and Poor's has us on a negative credit watch,
which means that it believes there is a 50 per cent chance that Western Australia's
AA+ credit rating will be downgraded in July.
(1) Can the
Treasurer confirm that the 2013 fiscal action plan has had $200 million of
slippage because the former Treasurer booked the land sales revenue too early?
(2) Can the
Treasurer confirm whether the workforce renewal policy has had $458 million of
slippage over the forward estimates since the midyear review?
(3) Given these facts, how likely is
it that WA will lose its AA+ credit rating next month?
454. Mr B.S. WYATT to the Treasurer:
I refer to Moody's Investors
Service's recent decision on the state government's credit
rating, and that Standard and Poor's has us on a negative credit watch,
which means that it believes there is a 50 per cent chance that Western Australia's
AA+ credit rating will be downgraded in July.
(1) Can the
Treasurer confirm that the 2013 fiscal action plan has had $200 million of
slippage because the former Treasurer booked the land sales revenue too early?
(2) Can the
Treasurer confirm whether the workforce renewal policy has had $458 million of
slippage over the forward estimates since the midyear review?
(3) Given these facts, how likely is
it that WA will lose its AA+ credit rating next month?
AnswerView source ↗
(1)–(3) I
thank the member for the questions. Yes, it is true that last week Moody's
put us on a negative watch. There has been some slippage in terms of the land—that
is, some years ago, the previous Treasurer booked $200 million in savings from
land sales in the budget. We have revised that from $200 million to $268 million,
but it will be over a longer period. We have also revised somewhat the
workforce reform program, and we still expect to receive $1.3 billion in
savings, but over five rather than four years.
Does our budget released a little
over a month ago achieve substantial reductions in savings both in 2014–15
and through the forward estimates? Yes, it does. Expenditure growth for the first
three-quarters of this year has been the lowest in decades as a result of the
fiscal action plan and other programs that have flowed from it. The budget
showed that expenditure growth is expected to be 2.5 per cent per year on
average over the four years, and salary growth is 2.4 per cent. They are record
lows. Indeed, let me just emphasise that because it shows that our programs are
working, and Moody's is recognising that. Over the first nine months of
this year, overall expenditure growth was 0.3 per cent—I repeat, 0.3 per
cent—and salary growth was 2.5 per cent. That is not as a result of us
doing nothing; that is an explicit direct result of the reforms that we have
put in over the last three or four years. The rating agencies recognise that
and I am confident that it will be recognised into the future. I look forward
to members opposite supporting the policies that will produce those
efficiencies.
thank the member for the questions. Yes, it is true that last week Moody's
put us on a negative watch. There has been some slippage in terms of the land—that
is, some years ago, the previous Treasurer booked $200 million in savings from
land sales in the budget. We have revised that from $200 million to $268 million,
but it will be over a longer period. We have also revised somewhat the
workforce reform program, and we still expect to receive $1.3 billion in
savings, but over five rather than four years.
Does our budget released a little
over a month ago achieve substantial reductions in savings both in 2014–15
and through the forward estimates? Yes, it does. Expenditure growth for the first
three-quarters of this year has been the lowest in decades as a result of the
fiscal action plan and other programs that have flowed from it. The budget
showed that expenditure growth is expected to be 2.5 per cent per year on
average over the four years, and salary growth is 2.4 per cent. They are record
lows. Indeed, let me just emphasise that because it shows that our programs are
working, and Moody's is recognising that. Over the first nine months of
this year, overall expenditure growth was 0.3 per cent—I repeat, 0.3 per
cent—and salary growth was 2.5 per cent. That is not as a result of us
doing nothing; that is an explicit direct result of the reforms that we have
put in over the last three or four years. The rating agencies recognise that
and I am confident that it will be recognised into the future. I look forward
to members opposite supporting the policies that will produce those
efficiencies.
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