❓ Treasurer Buswell addresses the WA parliament regarding Standard & Poor's commentary on the state's AAA credit rating, highlighting both reaffirmed strengths and potential risks from commodity price volatility. He also touts positive economic indicators like state final demand growth and job creation.
AnsweredQoN 644Legislative Assembly
QuestionView source ↗
STATE ECONOMY — STANDARD AND POOR'S
COMMENTARY
644. Dr M.D. NAHAN to the Treasurer:
I refer to the release of Standard and Poor's outlook
on Western Australia's rating. Could the Treasurer please update the
house on Standard and Poor's commentary about the state's
finances, and, more broadly, the health of the state's economy?
COMMENTARY
644. Dr M.D. NAHAN to the Treasurer:
I refer to the release of Standard and Poor's outlook
on Western Australia's rating. Could the Treasurer please update the
house on Standard and Poor's commentary about the state's
finances, and, more broadly, the health of the state's economy?
AnswerView source ↗
I thank the member for the question. Standard and Poor's
produced a ratings outlook, a ratings direct commentary, today. I think there
are two important —
Mr E.S. Ripper :
Downgraded us from stable to negative.
Mr T.R. BUSWELL :
There are two important issues that it has canvassed.
Mr E.S. Ripper : A
one in three chance of WA's ratings being downgraded!
The SPEAKER :
Member for Belmont!
Mr T.R. BUSWELL :
Firstly, Standard and Poor's reaffirmed the state's AAA credit
rating, but it did make —
Mr E.S. Ripper :
They're not happy about the future!
The SPEAKER :
Member for Belmont!
Mr T.R. BUSWELL :
Standard and Poor's made some very pertinent comments about the
potential impact of volatility and fluctuations in currency and volatility and
fluctuations in commodity prices on the state's finances. I think that
is an entirely accurate reflection of the circumstances that we find ourselves
in. I think that it is entirely consistent with recent commentary —
Mr
E.S. Ripper interjected.
The
SPEAKER : Member for Belmont, I quite often enjoy hearing from you in this
place, but not in these circumstances. I formally call you to order for the
first time today.
Mr
T.R. BUSWELL : He is obviously reinvigorated after that poll last week, Mr
Speaker, and that reinvigoration continues to grow!
Mr
E.S. Ripper : I'm just reading the Business News report.
Mr
T.R. BUSWELL : First, let me remake the point: it is entirely consistent
with our recent commentary around revenue volatility. I think that it
vindicates the government's decision a few weeks ago to make some
pretty tough decisions on saving measures. That is what I think it does. I will
read very quickly one or two of the paragraphs from Standard and Poor's
—
The ratings on WA reflect our view
of the strong institutional framework benefiting state governments in
Australia, plus WA's very high GSP per capita, and the state's
moderate debt burden. These strengths are offset by limited budgetary
flexibility, and economic concentration in the mining sector, which can be
volatile.
That is an entirely accurate snapshot of the state's
fiscal position.
I move on to look at a couple of indicators of the strength
of the state's economy, because the state's economy is strong.
The recently released Annual Report on
State Finances noted that state final demand, which is the measure of the
internal domestic state economy, grew in 2011–12 by 14.7 per cent. That
is 14.7 per cent growth in the size of the state's domestic economy.
Practically —
Dr M.D. Nahan : And
that doesn't include exports.
Mr T.R. BUSWELL :
It does not include exports or imports, of course. Members would not find a
level of economic growth of that magnitude, I would suggest, in any developed
market-based western economy.
Recently, there has been some other interesting news. The
September employment data came out and that showed something very interesting.
It showed that across Australia in September, 14 472 jobs were created and of
those, 11 081 were created in Western Australia. Seventy-six per cent of the
total national jobs growth in Australia in the month of September happened in
Western Australia. As a digression —
Several members interjected.
Mr T.R. BUSWELL :
That is a very important point, member for Cockburn. In relation to the
manufacturing sector, August 2011 —
Mr P.B. Watson interjected.
Mr T.R. BUSWELL :
Listen to this, member for Albany, it is important. From August 2011 to August
2012, employment in the Western Australian manufacturing sector increased by 8 195
jobs. Why is the member for Cockburn shaking his head? Does he not believe it
or does he not like the news?
Mr F.M. Logan : It's
not around my area!
Mr T.R. BUSWELL :
Member for Cockburn —
Several members interjected.
Mr T.R. BUSWELL : I
would not want to work around the member for Cockburn's area either!
The member for Cockburn is there; he is a natural disincentive to employment.
The member for Cockburn is a natural incentive for localised migration; that is
what the member for Cockburn is.
Getting back to it, manufacturing —
Several members interjected.
The SPEAKER : Thank
you, members!
Mr T.R. BUSWELL :
There were 8 195 new jobs in manufacturing in Western Australia from September
2011 to September 2012, without the opposition's piece of legislation;
that is a 9.4 per cent increase in manufacturing sector jobs. The next best
performing state was Victoria, which was flat. The next best performing state
was New South Wales, which lost 8 000 jobs.
Queensland lost 11 000 jobs and South Australia lost 11 395
jobs in manufacturing. So, on the jobs front, economic performance in this
state is very strong. If we look at trade, in August, the annualised trade
outcome from Western Australia was exports of $120 billion. Western Australia,
with 10 per cent of the nation's economy, is exporting 46 per cent of
the nation's exports. It is little wonder that we claim to be, and are,
the economic driver of this country.
I close with a couple of comments around the AAA credit
rating. There is a threat to the AAA credit rating—it is the Leader of
the Opposition! When commenting on where the Premier should work from, the
Leader of the Opposition said today that he would work from his own motor vehicle
and that he did not need an office! Did the Leader of the Opposition say that?
Did he say that in a press conference? Was the Leader of the Opposition in a
press conference criticising everybody else for their office—this from
a person who wants brighter lights around his mirror? Was the Leader of the
Opposition out there and did he make the comment that he would work from his
car and that he did not need an office? The Leader of the Opposition did. As I
conclude, I will very quickly say why —
Mr P. Papalia interjected.
The SPEAKER :
Member for Warnbro!
Mr T.R. BUSWELL : I
will tell the Leader of the Opposition why he is a threat to the state's
AAA credit rating. Firstly, he would never have the political courage or
ability to deliver the savings that this government has been able to deliver
time and time again, and if he wants to know why, go and have a listen to the
way he grovelled to his union paymasters out the front today.
Mr B.S. Wyatt interjected.
The SPEAKER :
Member for Victoria Park!
Mr T.R. BUSWELL :
Secondly, look at the policy ideas the Leader of the Opposition has put forward
of late. There is the policy idea to abolish the tariff equalisation
contribution at a cost of $820 million. There is the policy idea to take back
the contracts at Fiona Stanley Hospital and Midland Health Campus, which would
cost about $200 million. The Leader of the Opposition has spent $1 billion in
two strokes of the pen. He would erode the state's surplus and he would
make sure that this state lost its AAA credit rating with the stroke of a pen.
produced a ratings outlook, a ratings direct commentary, today. I think there
are two important —
Mr E.S. Ripper :
Downgraded us from stable to negative.
Mr T.R. BUSWELL :
There are two important issues that it has canvassed.
Mr E.S. Ripper : A
one in three chance of WA's ratings being downgraded!
The SPEAKER :
Member for Belmont!
Mr T.R. BUSWELL :
Firstly, Standard and Poor's reaffirmed the state's AAA credit
rating, but it did make —
Mr E.S. Ripper :
They're not happy about the future!
The SPEAKER :
Member for Belmont!
Mr T.R. BUSWELL :
Standard and Poor's made some very pertinent comments about the
potential impact of volatility and fluctuations in currency and volatility and
fluctuations in commodity prices on the state's finances. I think that
is an entirely accurate reflection of the circumstances that we find ourselves
in. I think that it is entirely consistent with recent commentary —
Mr
E.S. Ripper interjected.
The
SPEAKER : Member for Belmont, I quite often enjoy hearing from you in this
place, but not in these circumstances. I formally call you to order for the
first time today.
Mr
T.R. BUSWELL : He is obviously reinvigorated after that poll last week, Mr
Speaker, and that reinvigoration continues to grow!
Mr
E.S. Ripper : I'm just reading the Business News report.
Mr
T.R. BUSWELL : First, let me remake the point: it is entirely consistent
with our recent commentary around revenue volatility. I think that it
vindicates the government's decision a few weeks ago to make some
pretty tough decisions on saving measures. That is what I think it does. I will
read very quickly one or two of the paragraphs from Standard and Poor's
—
The ratings on WA reflect our view
of the strong institutional framework benefiting state governments in
Australia, plus WA's very high GSP per capita, and the state's
moderate debt burden. These strengths are offset by limited budgetary
flexibility, and economic concentration in the mining sector, which can be
volatile.
That is an entirely accurate snapshot of the state's
fiscal position.
I move on to look at a couple of indicators of the strength
of the state's economy, because the state's economy is strong.
The recently released Annual Report on
State Finances noted that state final demand, which is the measure of the
internal domestic state economy, grew in 2011–12 by 14.7 per cent. That
is 14.7 per cent growth in the size of the state's domestic economy.
Practically —
Dr M.D. Nahan : And
that doesn't include exports.
Mr T.R. BUSWELL :
It does not include exports or imports, of course. Members would not find a
level of economic growth of that magnitude, I would suggest, in any developed
market-based western economy.
Recently, there has been some other interesting news. The
September employment data came out and that showed something very interesting.
It showed that across Australia in September, 14 472 jobs were created and of
those, 11 081 were created in Western Australia. Seventy-six per cent of the
total national jobs growth in Australia in the month of September happened in
Western Australia. As a digression —
Several members interjected.
Mr T.R. BUSWELL :
That is a very important point, member for Cockburn. In relation to the
manufacturing sector, August 2011 —
Mr P.B. Watson interjected.
Mr T.R. BUSWELL :
Listen to this, member for Albany, it is important. From August 2011 to August
2012, employment in the Western Australian manufacturing sector increased by 8 195
jobs. Why is the member for Cockburn shaking his head? Does he not believe it
or does he not like the news?
Mr F.M. Logan : It's
not around my area!
Mr T.R. BUSWELL :
Member for Cockburn —
Several members interjected.
Mr T.R. BUSWELL : I
would not want to work around the member for Cockburn's area either!
The member for Cockburn is there; he is a natural disincentive to employment.
The member for Cockburn is a natural incentive for localised migration; that is
what the member for Cockburn is.
Getting back to it, manufacturing —
Several members interjected.
The SPEAKER : Thank
you, members!
Mr T.R. BUSWELL :
There were 8 195 new jobs in manufacturing in Western Australia from September
2011 to September 2012, without the opposition's piece of legislation;
that is a 9.4 per cent increase in manufacturing sector jobs. The next best
performing state was Victoria, which was flat. The next best performing state
was New South Wales, which lost 8 000 jobs.
Queensland lost 11 000 jobs and South Australia lost 11 395
jobs in manufacturing. So, on the jobs front, economic performance in this
state is very strong. If we look at trade, in August, the annualised trade
outcome from Western Australia was exports of $120 billion. Western Australia,
with 10 per cent of the nation's economy, is exporting 46 per cent of
the nation's exports. It is little wonder that we claim to be, and are,
the economic driver of this country.
I close with a couple of comments around the AAA credit
rating. There is a threat to the AAA credit rating—it is the Leader of
the Opposition! When commenting on where the Premier should work from, the
Leader of the Opposition said today that he would work from his own motor vehicle
and that he did not need an office! Did the Leader of the Opposition say that?
Did he say that in a press conference? Was the Leader of the Opposition in a
press conference criticising everybody else for their office—this from
a person who wants brighter lights around his mirror? Was the Leader of the
Opposition out there and did he make the comment that he would work from his
car and that he did not need an office? The Leader of the Opposition did. As I
conclude, I will very quickly say why —
Mr P. Papalia interjected.
The SPEAKER :
Member for Warnbro!
Mr T.R. BUSWELL : I
will tell the Leader of the Opposition why he is a threat to the state's
AAA credit rating. Firstly, he would never have the political courage or
ability to deliver the savings that this government has been able to deliver
time and time again, and if he wants to know why, go and have a listen to the
way he grovelled to his union paymasters out the front today.
Mr B.S. Wyatt interjected.
The SPEAKER :
Member for Victoria Park!
Mr T.R. BUSWELL :
Secondly, look at the policy ideas the Leader of the Opposition has put forward
of late. There is the policy idea to abolish the tariff equalisation
contribution at a cost of $820 million. There is the policy idea to take back
the contracts at Fiona Stanley Hospital and Midland Health Campus, which would
cost about $200 million. The Leader of the Opposition has spent $1 billion in
two strokes of the pen. He would erode the state's surplus and he would
make sure that this state lost its AAA credit rating with the stroke of a pen.
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