❓ Shadow Treasurer Wyatt questions Treasurer Buswell about increasing state debt, referencing a previous statement by the Premier. Buswell defends the borrowing, citing infrastructure investment and revenue decline.
AnsweredQoN 424Legislative Assembly
QuestionView source ↗
STATE BUDGET 2012–13 — NET
DEBT
424. Mr B.S. WYATT to the Treasurer:
I refer to the Loan Bill 2012 that
the Treasurer introduced to Parliament today and to the government's
debt management plan, as articulated by the Premier on 4 September 2010, which
states —
''In reality you don't
have to pay back the debt and as a guide I'm intending keeping our
total level of net debt below $20 billion ''
In light of this, I ask —
(1) Can the
Treasurer confirm that together with his 2009 Loan Bill, he has now sought
authorisation for government borrowing of $13.3 billion?
(2) Can the
Treasurer explain why his 2009 Loan Bill estimated his borrowing requirement
for the 2012–13 financial year to be $1.2 billion, yet his new Loan
Bill states that borrowing requirements for 2012–13 will be $3 billion?
(3) In light of
the fact that net debt is projected to reach $23.1 billion, does the Treasurer
endorse the Premier's statement —
''In reality you don't
have to pay back the debt ''
DEBT
424. Mr B.S. WYATT to the Treasurer:
I refer to the Loan Bill 2012 that
the Treasurer introduced to Parliament today and to the government's
debt management plan, as articulated by the Premier on 4 September 2010, which
states —
''In reality you don't
have to pay back the debt and as a guide I'm intending keeping our
total level of net debt below $20 billion ''
In light of this, I ask —
(1) Can the
Treasurer confirm that together with his 2009 Loan Bill, he has now sought
authorisation for government borrowing of $13.3 billion?
(2) Can the
Treasurer explain why his 2009 Loan Bill estimated his borrowing requirement
for the 2012–13 financial year to be $1.2 billion, yet his new Loan
Bill states that borrowing requirements for 2012–13 will be $3 billion?
(3) In light of
the fact that net debt is projected to reach $23.1 billion, does the Treasurer
endorse the Premier's statement —
''In reality you don't
have to pay back the debt ''
AnswerView source ↗
(1)–(3) The
reality is that if the shadow Treasurer looks at the forward estimates, the
state begins to pay back debt. If he looks at the forward estimates, net debt
actually declines in the fourth year of the forward estimates. What that means
in that particular year is that we are repaying more than we are borrowing and
net debt will decline. For a range of factors, on current estimates, net debt
will peak in 2014–15 —
Mr B.S. Wyatt : Do
you expect that to be the same in the midyear review?
Mr T.R. BUSWELL :
We are working through the midyear review; it is a challenging process, however
we work through it. Net debt on the budget estimates will decline the following
year. I think it is important to understand why we bring a loan bill into
Parliament.
Mr B.S. Wyatt : We
understand.
Mr T.R. BUSWELL :
Let me explain to the rest of members. I know the member opposite understands a
lot, but a lot of the others do not. Perhaps he understands more than he thinks
he understands. But the point of the matter is this: the Loan Bill provides
money for the government to invest in infrastructure. The Loan Bill in
particular is tied to funding through the general government sector. The
general government sector infrastructure spend includes things like hospitals,
schools, roads, police stations, prisons, train stations, stadiums and the
like. We borrow money to invest in those things, and we do not apologise for
the fact that we are borrowing money at this point of time in the state's
growth cycle to invest in that very, very important social infrastructure. The
last part of the question was: why are we borrowing more this year than was
anticipated in 2009? That is because our revenues have declined. I do not know
whether the member for Victoria Park has realised that the goods and services
tax component, for example, of our revenues has declined significantly. The net
result of that has left us with two choices. Firstly, we could cut spending and
we could stop investing —
Mr B.S. Wyatt : Is
revenue growth less than it was last year?
Mr T.R. BUSWELL :
No, but revenue growth in some areas is less than it was anticipated in 2009—so
we had two options. We can either reduce the asset investment program or borrow
money. The member for Victoria Park has repeatedly come into this place and
said that debt is bad. At the same time every single one of his colleagues who
got up and spoke last night wanted us to spend more money. I have said to him
before that he cannot be all pole and no flag. At some stage he has to run his
flag up the mast and let us know where he stands. At some stage he has to let
us know what spending programs his party is going to cut to reduce debt,
because I do not think he would dare offer one.
reality is that if the shadow Treasurer looks at the forward estimates, the
state begins to pay back debt. If he looks at the forward estimates, net debt
actually declines in the fourth year of the forward estimates. What that means
in that particular year is that we are repaying more than we are borrowing and
net debt will decline. For a range of factors, on current estimates, net debt
will peak in 2014–15 —
Mr B.S. Wyatt : Do
you expect that to be the same in the midyear review?
Mr T.R. BUSWELL :
We are working through the midyear review; it is a challenging process, however
we work through it. Net debt on the budget estimates will decline the following
year. I think it is important to understand why we bring a loan bill into
Parliament.
Mr B.S. Wyatt : We
understand.
Mr T.R. BUSWELL :
Let me explain to the rest of members. I know the member opposite understands a
lot, but a lot of the others do not. Perhaps he understands more than he thinks
he understands. But the point of the matter is this: the Loan Bill provides
money for the government to invest in infrastructure. The Loan Bill in
particular is tied to funding through the general government sector. The
general government sector infrastructure spend includes things like hospitals,
schools, roads, police stations, prisons, train stations, stadiums and the
like. We borrow money to invest in those things, and we do not apologise for
the fact that we are borrowing money at this point of time in the state's
growth cycle to invest in that very, very important social infrastructure. The
last part of the question was: why are we borrowing more this year than was
anticipated in 2009? That is because our revenues have declined. I do not know
whether the member for Victoria Park has realised that the goods and services
tax component, for example, of our revenues has declined significantly. The net
result of that has left us with two choices. Firstly, we could cut spending and
we could stop investing —
Mr B.S. Wyatt : Is
revenue growth less than it was last year?
Mr T.R. BUSWELL :
No, but revenue growth in some areas is less than it was anticipated in 2009—so
we had two options. We can either reduce the asset investment program or borrow
money. The member for Victoria Park has repeatedly come into this place and
said that debt is bad. At the same time every single one of his colleagues who
got up and spoke last night wanted us to spend more money. I have said to him
before that he cannot be all pole and no flag. At some stage he has to run his
flag up the mast and let us know where he stands. At some stage he has to let
us know what spending programs his party is going to cut to reduce debt,
because I do not think he would dare offer one.
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