❓ The Leader of the Opposition questions the Premier about exceeding his self-imposed debt limit, while the Premier defends the state's debt position relative to other states based on debt-to-revenue ratio and highlights revenue volatility.
AnsweredQoN 327Legislative Assembly
QuestionView source ↗
ELECTION
PROMISES — STATE DEBT
327. Mr M. McGOWAN to the
Premier:
I refer to the Premier's broken commitment from
September 2010: ''I would not want to see, in absolute terms, state debt
rise above $20 billion.'' With debt now at $24.9 billion this financial
year, what is his new objective for state debt?
PROMISES — STATE DEBT
327. Mr M. McGOWAN to the
Premier:
I refer to the Premier's broken commitment from
September 2010: ''I would not want to see, in absolute terms, state debt
rise above $20 billion.'' With debt now at $24.9 billion this financial
year, what is his new objective for state debt?
AnswerView source ↗
I think debt is at $22 billion, as at the end of this financial
year. Yes, I did make the statement that $20 billion was where I would feel
comfortable, so it is beyond the comfort zone. Again, if people look closely at
the budget papers, they will notice that debt, in absolute terms of course, is
lower than that in most other states; and, yes, we do have a smaller
population. The measure that one can look at is debt as a percentage of
revenue. In Western Australia, the figure for debt as a percentage of state
government revenue is 60 per cent. In all other states, with the exception of
Tasmania, the figure is higher. I think the figure in New South Wales is about
75 per cent or thereabouts.
Mr M. McGowan :
They've got their AAA.
Mrs M.H. Roberts :
So it's okay then.
Mr C.J. BARNETT :
No, but I make the point that if we are going to have a serious look at debt,
we look at it as a relative statistic, and it is debt to revenue. Our
debt-to-revenue ratio is lower than that in any other state. Having said that,
and as the Treasurer outlined last week, the issue is not so much the absolute
level of debt; the issue is the volatility of our revenue sources and, in
particular, our increasing reliance on mining royalties, particularly iron ore,
and the fact that each year the absolute level of GST grants to Western
Australia is declining. The Leader of the Opposition seems to be now excusing
that. I do not.
year. Yes, I did make the statement that $20 billion was where I would feel
comfortable, so it is beyond the comfort zone. Again, if people look closely at
the budget papers, they will notice that debt, in absolute terms of course, is
lower than that in most other states; and, yes, we do have a smaller
population. The measure that one can look at is debt as a percentage of
revenue. In Western Australia, the figure for debt as a percentage of state
government revenue is 60 per cent. In all other states, with the exception of
Tasmania, the figure is higher. I think the figure in New South Wales is about
75 per cent or thereabouts.
Mr M. McGowan :
They've got their AAA.
Mrs M.H. Roberts :
So it's okay then.
Mr C.J. BARNETT :
No, but I make the point that if we are going to have a serious look at debt,
we look at it as a relative statistic, and it is debt to revenue. Our
debt-to-revenue ratio is lower than that in any other state. Having said that,
and as the Treasurer outlined last week, the issue is not so much the absolute
level of debt; the issue is the volatility of our revenue sources and, in
particular, our increasing reliance on mining royalties, particularly iron ore,
and the fact that each year the absolute level of GST grants to Western
Australia is declining. The Leader of the Opposition seems to be now excusing
that. I do not.
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