❓ Opposition questions the Treasurer's conflicting statements regarding the use of asset sale proceeds for debt reduction versus funding capital works. The Treasurer's response lacks specific details on allocation percentages and the debt cap.
AnsweredQoN 117Legislative Assembly
QuestionView source ↗
ASSET SALES — DEBT REDUCTION–STATE
EXPENDITURE
117. Mr M. McGOWAN to the Treasurer:
I refer to the debate yesterday when
the Treasurer stated that proceeds from asset divestment would go into debt reduction
and funding spending, which is contrary to his evidence to the annual reports
hearings last year when he said —
� sale proceeds will be used to pay
down debt rather than purchase new assets.
(1) What
percentage of the proceeds of the sales will go into debt reduction and what
percentage into spending?
(2) What will the
debt cap referred to by the Premier yesterday be?
EXPENDITURE
117. Mr M. McGOWAN to the Treasurer:
I refer to the debate yesterday when
the Treasurer stated that proceeds from asset divestment would go into debt reduction
and funding spending, which is contrary to his evidence to the annual reports
hearings last year when he said —
� sale proceeds will be used to pay
down debt rather than purchase new assets.
(1) What
percentage of the proceeds of the sales will go into debt reduction and what
percentage into spending?
(2) What will the
debt cap referred to by the Premier yesterday be?
AnswerView source ↗
(1)–(2) I
thank the member for the question. The intention is to use the proceeds of
assets sales to pay down debt. We have a very large and active capital works
program.
Mr
M. McGowan : That is what you said yesterday.
Dr
M.D. NAHAN : Yes. We have a very large capital works program, including of
course the Forrestfield‑Airport Link, and Metro Area Express light rail
is still in there, and a whole range of other assets, and those are adding to
our estimated debt levels in four or five years—in other words, our
debt levels in the forward estimates. When we sell these assets, we will use
them to reduce debt.
Mr
B.S. Wyatt : How much?
Dr
M.D. NAHAN : Let me finish. In the process of reducing debt, we also fund
capital works programs that are committed. They are included in our debt
profile.
Several members interjected.
The
SPEAKER : Members!
Dr
M.D. NAHAN : In other words, when we pay down debt, we also fund the things
that debts are being used for. It is very simple. It might be hard for you,
mate, perhaps to understand, but that is what I said. As to what proportion we
will use, we will make that decision when we sell it. We have not committed any
of the proceeds of the asset sales other than the one we have sold. None of it
is in the budget. None of it has been allocated, and will not be until we first
sell the asset and know what the value for it will be. The intention is to
reduce debt. As to what the debt cap is going to be—the limits on debt—let
us get there first before we do it. We already do —
Several members interjected.
The
SPEAKER : Members!
Dr
M.D. NAHAN : Our current debt level as at the midyear review was $29 billion—not
too high.
Mr
D.J. Kelly : Not too high?
Dr
M.D. NAHAN : The member for Bassendean would not know.
Mr
B.S. Wyatt : The previous cap was $20 billion.
Dr
M.D. NAHAN : No; it was $29 billion.
Several members interjected.
The
SPEAKER : Member for Cockburn! Minister, a quick answer through the Chair.
We are not making good time at all.
Dr
M.D. NAHAN : It is $29 billion. It is scheduled to go up to $39 billion in
the forward estimates. That is too high. We will bring it back.
Mr
P. Papalia : How?
Dr
M.D. NAHAN : It depends upon our effectiveness at reducing expenditure
growth, which you guys fought against every inch of the way. It depends upon
our revenue flows, and, in part, our reforms, in particular to GST, which you
were sandbagging. Of course, it also depends upon the value of the assets
sales, and all three of them are yet to be determined.
thank the member for the question. The intention is to use the proceeds of
assets sales to pay down debt. We have a very large and active capital works
program.
Mr
M. McGowan : That is what you said yesterday.
Dr
M.D. NAHAN : Yes. We have a very large capital works program, including of
course the Forrestfield‑Airport Link, and Metro Area Express light rail
is still in there, and a whole range of other assets, and those are adding to
our estimated debt levels in four or five years—in other words, our
debt levels in the forward estimates. When we sell these assets, we will use
them to reduce debt.
Mr
B.S. Wyatt : How much?
Dr
M.D. NAHAN : Let me finish. In the process of reducing debt, we also fund
capital works programs that are committed. They are included in our debt
profile.
Several members interjected.
The
SPEAKER : Members!
Dr
M.D. NAHAN : In other words, when we pay down debt, we also fund the things
that debts are being used for. It is very simple. It might be hard for you,
mate, perhaps to understand, but that is what I said. As to what proportion we
will use, we will make that decision when we sell it. We have not committed any
of the proceeds of the asset sales other than the one we have sold. None of it
is in the budget. None of it has been allocated, and will not be until we first
sell the asset and know what the value for it will be. The intention is to
reduce debt. As to what the debt cap is going to be—the limits on debt—let
us get there first before we do it. We already do —
Several members interjected.
The
SPEAKER : Members!
Dr
M.D. NAHAN : Our current debt level as at the midyear review was $29 billion—not
too high.
Mr
D.J. Kelly : Not too high?
Dr
M.D. NAHAN : The member for Bassendean would not know.
Mr
B.S. Wyatt : The previous cap was $20 billion.
Dr
M.D. NAHAN : No; it was $29 billion.
Several members interjected.
The
SPEAKER : Member for Cockburn! Minister, a quick answer through the Chair.
We are not making good time at all.
Dr
M.D. NAHAN : It is $29 billion. It is scheduled to go up to $39 billion in
the forward estimates. That is too high. We will bring it back.
Mr
P. Papalia : How?
Dr
M.D. NAHAN : It depends upon our effectiveness at reducing expenditure
growth, which you guys fought against every inch of the way. It depends upon
our revenue flows, and, in part, our reforms, in particular to GST, which you
were sandbagging. Of course, it also depends upon the value of the assets
sales, and all three of them are yet to be determined.
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