❓ Question regarding budget blow-outs and the definition of 'out-turn dollars' in relation to infrastructure project costs. The Treasurer defends the government's financial management and explains 'out-turn dollars' as inflation-adjusted project costs.
AnsweredQoN 274Legislative Assembly
QuestionView source ↗
I refer the Treasurer to the recent blow-outs in the financial projections announced by the government and to the new terminology known as “out-turn dollars” that the Minister for Planning and Infrastructure invented when she said that a revised estimate in out-turn dollars would be made available in the next couple of weeks. What exactly are out-turn dollars, and exactly how many more of these out-turn dollars will be spent on propping up the Treasurer’s dodgy budget projections that have now been revealed as infrastructure project blow-outs? Mr E.S. RIPPER
AnswerView source ↗
The opposition complains of what it calls dodgy budget projections. The opposition’s record shows that it just had dodgy budgets and outcomes, not projections. The opposition’s record was five budget deficits out of eight. The opposition has trouble coming to grips with the fact that the government is on the way to delivering a fifth budget surplus - five out of five - whereas the opposition could manage only three out of eight. We will ensure the retention of the state’s AAA credit rating, which is the seal of approval for the responsible management of the state’s finances. When there is a $16 billion capital works program over four years in an economy that is booming like the Western Australian economy is, there will be cost pressures. The government is not immune to the cost pressures that other project proponents must endure. It is the responsibility of the government to manage those cost pressures as efficiently and effectively as it can. We will pay close attention to the management of that matter as we proceed with delivering what will be another successful budget outcome. I am not saying that we can wish away those cost pressures. However, there are ways of managing them, including paying very careful attention to the scope of projects and looking at ways of realising on surplus assets, particularly land assets, for which a portfolio agency might have responsibility. There is also the possibility of deferring or reducing expenditure on lower priority projects, if there are cost pressures on projects that have a higher priority. Finally, the Leader of the Opposition asked me about the comments of my colleague on out-turn dollars. I would not regard that terminology as technical terminology, but I assume that my colleague was referring to the fact that, when initial estimates for a project are made, and the project is not implemented for a number of years into the future, costs rise over that time, and the final price may have to be adjusted for the impact of the usual inflationary pressures. The usual inflationary pressures are, in fact, stronger at this time because we have a booming economy. I do not have any particular difficulty with people drawing attention to the fact that when a project is first proposed the cost estimates may be lower than the final cost estimates, usually because some years have passed in the interim.
Mr E.S. RIPPER replied: The opposition complains of what it calls dodgy budget projections. The opposition’s record shows that it just had dodgy budgets and outcomes, not projections. The opposition’s record was five budget deficits out of eight. The opposition has trouble coming to grips with the fact that the government is on the way to delivering a fifth budget surplus - five out of five - whereas the opposition could manage only three out of eight. We will ensure the retention of the state’s AAA credit rating, which is the seal of approval for the responsible management of the state’s finances. When there is a $16 billion capital works program over four years in an economy that is booming like the Western Australian economy is, there will be cost pressures. The government is not immune to the cost pressures that other project proponents must endure. It is the responsibility of the government to manage those cost pressures as efficiently and effectively as it can. We will pay close attention to the management of that matter as we proceed with delivering what will be another successful budget outcome. I am not saying that we can wish away those cost pressures. However, there are ways of managing them, including paying very careful attention to the scope of projects and looking at ways of realising on surplus assets, particularly land assets, for which a portfolio agency might have responsibility. There is also the possibility of deferring or reducing expenditure on lower priority projects, if there are cost pressures on projects that have a higher priority. Finally, the Leader of the Opposition asked me about the comments of my colleague on out-turn dollars. I would not regard that terminology as technical terminology, but I assume that my colleague was referring to the fact that, when initial estimates for a project are made, and the project is not implemented for a number of years into the future, costs rise over that time, and the final price may have to be adjusted for the impact of the usual inflationary pressures. The usual inflationary pressures are, in fact, stronger at this time because we have a booming economy. I do not have any particular difficulty with people drawing attention to the fact that when a project is first proposed the cost estimates may be lower than the final cost estimates, usually because some years have passed in the interim.
The opposition complains of what it calls dodgy budget projections. The opposition’s record shows that it just had dodgy budgets and outcomes, not projections. The opposition’s record was five budget deficits out of eight. The opposition has trouble coming to grips with the fact that the government is on the way to delivering a fifth budget surplus - five out of five - whereas the opposition could manage only three out of eight. We will ensure the retention of the state’s AAA credit rating, which is the seal of approval for the responsible management of the state’s finances. When there is a $16 billion capital works program over four years in an economy that is booming like the Western Australian economy is, there will be cost pressures. The government is not immune to the cost pressures that other project proponents must endure. It is the responsibility of the government to manage those cost pressures as efficiently and effectively as it can. We will pay close attention to the management of that matter as we proceed with delivering what will be another successful budget outcome. I am not saying that we can wish away those cost pressures. However, there are ways of managing them, including paying very careful attention to the scope of projects and looking at ways of realising on surplus assets, particularly land assets, for which a portfolio agency might have responsibility. There is also the possibility of deferring or reducing expenditure on lower priority projects, if there are cost pressures on projects that have a higher priority. Finally, the Leader of the Opposition asked me about the comments of my colleague on out-turn dollars. I would not regard that terminology as technical terminology, but I assume that my colleague was referring to the fact that, when initial estimates for a project are made, and the project is not implemented for a number of years into the future, costs rise over that time, and the final price may have to be adjusted for the impact of the usual inflationary pressures. The usual inflationary pressures are, in fact, stronger at this time because we have a booming economy. I do not have any particular difficulty with people drawing attention to the fact that when a project is first proposed the cost estimates may be lower than the final cost estimates, usually because some years have passed in the interim.
When there is a $16 billion capital works program over four years in an economy that is booming like the Western Australian economy is, there will be cost pressures. The government is not immune to the cost pressures that other project proponents must endure. It is the responsibility of the government to manage those cost pressures as efficiently and effectively as it can. We will pay close attention to the management of that matter as we proceed with delivering what will be another successful budget outcome. I am not saying that we can wish away those cost pressures. However, there are ways of managing them, including paying very careful attention to the scope of projects and looking at ways of realising on surplus assets, particularly land assets, for which a portfolio agency might have responsibility. There is also the possibility of deferring or reducing expenditure on lower priority projects, if there are cost pressures on projects that have a higher priority. Finally, the Leader of the Opposition asked me about the comments of my colleague on out-turn dollars. I would not regard that terminology as technical terminology, but I assume that my colleague was referring to the fact that, when initial estimates for a project are made, and the project is not implemented for a number of years into the future, costs rise over that time, and the final price may have to be adjusted for the impact of the usual inflationary pressures. The usual inflationary pressures are, in fact, stronger at this time because we have a booming economy. I do not have any particular difficulty with people drawing attention to the fact that when a project is first proposed the cost estimates may be lower than the final cost estimates, usually because some years have passed in the interim.
Finally, the Leader of the Opposition asked me about the comments of my colleague on out-turn dollars. I would not regard that terminology as technical terminology, but I assume that my colleague was referring to the fact that, when initial estimates for a project are made, and the project is not implemented for a number of years into the future, costs rise over that time, and the final price may have to be adjusted for the impact of the usual inflationary pressures. The usual inflationary pressures are, in fact, stronger at this time because we have a booming economy. I do not have any particular difficulty with people drawing attention to the fact that when a project is first proposed the cost estimates may be lower than the final cost estimates, usually because some years have passed in the interim.
Mr E.S. RIPPER replied: The opposition complains of what it calls dodgy budget projections. The opposition’s record shows that it just had dodgy budgets and outcomes, not projections. The opposition’s record was five budget deficits out of eight. The opposition has trouble coming to grips with the fact that the government is on the way to delivering a fifth budget surplus - five out of five - whereas the opposition could manage only three out of eight. We will ensure the retention of the state’s AAA credit rating, which is the seal of approval for the responsible management of the state’s finances. When there is a $16 billion capital works program over four years in an economy that is booming like the Western Australian economy is, there will be cost pressures. The government is not immune to the cost pressures that other project proponents must endure. It is the responsibility of the government to manage those cost pressures as efficiently and effectively as it can. We will pay close attention to the management of that matter as we proceed with delivering what will be another successful budget outcome. I am not saying that we can wish away those cost pressures. However, there are ways of managing them, including paying very careful attention to the scope of projects and looking at ways of realising on surplus assets, particularly land assets, for which a portfolio agency might have responsibility. There is also the possibility of deferring or reducing expenditure on lower priority projects, if there are cost pressures on projects that have a higher priority. Finally, the Leader of the Opposition asked me about the comments of my colleague on out-turn dollars. I would not regard that terminology as technical terminology, but I assume that my colleague was referring to the fact that, when initial estimates for a project are made, and the project is not implemented for a number of years into the future, costs rise over that time, and the final price may have to be adjusted for the impact of the usual inflationary pressures. The usual inflationary pressures are, in fact, stronger at this time because we have a booming economy. I do not have any particular difficulty with people drawing attention to the fact that when a project is first proposed the cost estimates may be lower than the final cost estimates, usually because some years have passed in the interim.
The opposition complains of what it calls dodgy budget projections. The opposition’s record shows that it just had dodgy budgets and outcomes, not projections. The opposition’s record was five budget deficits out of eight. The opposition has trouble coming to grips with the fact that the government is on the way to delivering a fifth budget surplus - five out of five - whereas the opposition could manage only three out of eight. We will ensure the retention of the state’s AAA credit rating, which is the seal of approval for the responsible management of the state’s finances. When there is a $16 billion capital works program over four years in an economy that is booming like the Western Australian economy is, there will be cost pressures. The government is not immune to the cost pressures that other project proponents must endure. It is the responsibility of the government to manage those cost pressures as efficiently and effectively as it can. We will pay close attention to the management of that matter as we proceed with delivering what will be another successful budget outcome. I am not saying that we can wish away those cost pressures. However, there are ways of managing them, including paying very careful attention to the scope of projects and looking at ways of realising on surplus assets, particularly land assets, for which a portfolio agency might have responsibility. There is also the possibility of deferring or reducing expenditure on lower priority projects, if there are cost pressures on projects that have a higher priority. Finally, the Leader of the Opposition asked me about the comments of my colleague on out-turn dollars. I would not regard that terminology as technical terminology, but I assume that my colleague was referring to the fact that, when initial estimates for a project are made, and the project is not implemented for a number of years into the future, costs rise over that time, and the final price may have to be adjusted for the impact of the usual inflationary pressures. The usual inflationary pressures are, in fact, stronger at this time because we have a booming economy. I do not have any particular difficulty with people drawing attention to the fact that when a project is first proposed the cost estimates may be lower than the final cost estimates, usually because some years have passed in the interim.
When there is a $16 billion capital works program over four years in an economy that is booming like the Western Australian economy is, there will be cost pressures. The government is not immune to the cost pressures that other project proponents must endure. It is the responsibility of the government to manage those cost pressures as efficiently and effectively as it can. We will pay close attention to the management of that matter as we proceed with delivering what will be another successful budget outcome. I am not saying that we can wish away those cost pressures. However, there are ways of managing them, including paying very careful attention to the scope of projects and looking at ways of realising on surplus assets, particularly land assets, for which a portfolio agency might have responsibility. There is also the possibility of deferring or reducing expenditure on lower priority projects, if there are cost pressures on projects that have a higher priority. Finally, the Leader of the Opposition asked me about the comments of my colleague on out-turn dollars. I would not regard that terminology as technical terminology, but I assume that my colleague was referring to the fact that, when initial estimates for a project are made, and the project is not implemented for a number of years into the future, costs rise over that time, and the final price may have to be adjusted for the impact of the usual inflationary pressures. The usual inflationary pressures are, in fact, stronger at this time because we have a booming economy. I do not have any particular difficulty with people drawing attention to the fact that when a project is first proposed the cost estimates may be lower than the final cost estimates, usually because some years have passed in the interim.
Finally, the Leader of the Opposition asked me about the comments of my colleague on out-turn dollars. I would not regard that terminology as technical terminology, but I assume that my colleague was referring to the fact that, when initial estimates for a project are made, and the project is not implemented for a number of years into the future, costs rise over that time, and the final price may have to be adjusted for the impact of the usual inflationary pressures. The usual inflationary pressures are, in fact, stronger at this time because we have a booming economy. I do not have any particular difficulty with people drawing attention to the fact that when a project is first proposed the cost estimates may be lower than the final cost estimates, usually because some years have passed in the interim.
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