❓ Deputy Premier Ripper answers a question about the 2000-01 budget surplus, explaining the one-off factors contributing to the higher-than-expected figure, including asset sales and favorable exchange rates.
AnsweredQoN 326Legislative Assembly
QuestionView source ↗
TREASURY ADVICE, 2000-01 SURPLUS
Has the Deputy Premier received any updated advice from the Treasury on the expected 2000-01 surplus? Mr RIPPER
Has the Deputy Premier received any updated advice from the Treasury on the expected 2000-01 surplus? Mr RIPPER
AnswerView source ↗
I thank the member for some notice of this question. As it happens, I have received some advice from the Treasury. I seek the indulgence of the House because it is important information. If the Opposition listens carefully, it might hear the figure it has been seeking. The Under Treasurer has provided me with the following advice - As requested, this minute outlines the major factors behind the larger than estimated operating surplus for 2000/01. I should point out that the 2000/01 outcome is still being finalised and some variations can be expected before the estimates are firm. The following comments are more indicative of movements in major aggregates than would normally be the case when dealing with final estimates. The operating surplus for 2000/01 is currently estimated to be $268 million which compares with the budget time estimate of $42 million and the estimate in the Pre-election Financial Projection Statement of $98 million. I want the Leader of the Opposition to keep listening because I shall give information about the one-off nature of that surplus. It is important for people’s understanding of the budget constraints on the Government. The advice continues - Expenses were approximately $531 million greater than the budget time estimate while revenues are in the order of $757 million higher. The growth in expenses was widely spread across agencies and a significant component (at least half) will have ongoing effects in future years. By comparison on the revenue side, a number of one-off factors were responsible for the higher than expected outcome. Specifically: $250 million in the form of dividends, tax equivalent payments and stamp duty revenues flowed into the budget from the sales of AlintaGas and the Westrail freight operations; $132 million from the oil price averaging $US29.90 over the year compared with the budget time estimate of $US22; The Opposition does not want to listen to this, but it should because it will get a lesson in economics from the Under Treasurer - $95 million from the exchange rate averaging $A/$US53.8c over the year compared with the budget time estimate of $A/$US60.5c; and other one-off revenue increases of around $100 million which included $27.5 million from diamond royalties, $25 million from unanticipated share and conveyance duty, and $30 million additional interest income associated with the temporary investment of proceeds from the two asset sales and delays in some capital programs. I know this is a long answer but it is important that the House understand what it means for the future. The member opposite says that if the Government gets a windfall one year it can increase expenditure in the next. That can happen only if there are new windfalls. The Under Treasurer deals with that particular issue - Of these revenue increases, the two asset sales clearly will not be repeated - That is commonsense - one cannot privatise an asset twice - and the favourable outcomes associated with the oil price and exchange rate are unlikely to carry forward into the budget year or the out-years. For instance, the oil price has been easing over recent months and is currently at around $US25, and the exchange rate has been strengthening and is currently just below US53c. In both cases, the outlook is for movements which will not assist the revenue. He concludes with the following paragraph - The larger than estimated operating surplus has assisted in reducing the growth in debt, which will ease the interest burden by about $15 million a year. This is an appropriate use of such a surplus as to do otherwise would be to build expenses through the budget which are unlikely to be supported by revenue. Let me repeat that last sentence - This is an appropriate use of such a surplus as to do otherwise would be to build expenses through the budget which are unlikely to be supported by revenue. That is what the previous Government did. It built expenses through the forward years unsupported by revenue. This State has had a windfall, but it will not be repeated. We shall be fortunate if it is. We cannot privatise an asset twice. Several members interjected. The ACTING SPEAKER: Order, members! The cross conversations are considered disorderly. I ask the minister to bring his remarks to a conclusion. Mr RIPPER: This side of the House will exercise financial discipline. We will not be windfall junkies!
Mr RIPPER replied: I thank the member for some notice of this question. As it happens, I have received some advice from the Treasury. I seek the indulgence of the House because it is important information. If the Opposition listens carefully, it might hear the figure it has been seeking. The Under Treasurer has provided me with the following advice - As requested, this minute outlines the major factors behind the larger than estimated operating surplus for 2000/01. I should point out that the 2000/01 outcome is still being finalised and some variations can be expected before the estimates are firm. The following comments are more indicative of movements in major aggregates than would normally be the case when dealing with final estimates. The operating surplus for 2000/01 is currently estimated to be $268 million which compares with the budget time estimate of $42 million and the estimate in the Pre-election Financial Projection Statement of $98 million. I want the Leader of the Opposition to keep listening because I shall give information about the one-off nature of that surplus. It is important for people’s understanding of the budget constraints on the Government. The advice continues - Expenses were approximately $531 million greater than the budget time estimate while revenues are in the order of $757 million higher. The growth in expenses was widely spread across agencies and a significant component (at least half) will have ongoing effects in future years. By comparison on the revenue side, a number of one-off factors were responsible for the higher than expected outcome. Specifically: $250 million in the form of dividends, tax equivalent payments and stamp duty revenues flowed into the budget from the sales of AlintaGas and the Westrail freight operations; $132 million from the oil price averaging $US29.90 over the year compared with the budget time estimate of $US22; The Opposition does not want to listen to this, but it should because it will get a lesson in economics from the Under Treasurer - $95 million from the exchange rate averaging $A/$US53.8c over the year compared with the budget time estimate of $A/$US60.5c; and other one-off revenue increases of around $100 million which included $27.5 million from diamond royalties, $25 million from unanticipated share and conveyance duty, and $30 million additional interest income associated with the temporary investment of proceeds from the two asset sales and delays in some capital programs. I know this is a long answer but it is important that the House understand what it means for the future. The member opposite says that if the Government gets a windfall one year it can increase expenditure in the next. That can happen only if there are new windfalls. The Under Treasurer deals with that particular issue - Of these revenue increases, the two asset sales clearly will not be repeated - That is commonsense - one cannot privatise an asset twice - and the favourable outcomes associated with the oil price and exchange rate are unlikely to carry forward into the budget year or the out-years. For instance, the oil price has been easing over recent months and is currently at around $US25, and the exchange rate has been strengthening and is currently just below US53c. In both cases, the outlook is for movements which will not assist the revenue. He concludes with the following paragraph - The larger than estimated operating surplus has assisted in reducing the growth in debt, which will ease the interest burden by about $15 million a year. This is an appropriate use of such a surplus as to do otherwise would be to build expenses through the budget which are unlikely to be supported by revenue. Let me repeat that last sentence - This is an appropriate use of such a surplus as to do otherwise would be to build expenses through the budget which are unlikely to be supported by revenue. That is what the previous Government did. It built expenses through the forward years unsupported by revenue. This State has had a windfall, but it will not be repeated. We shall be fortunate if it is. We cannot privatise an asset twice. Several members interjected. The ACTING SPEAKER: Order, members! The cross conversations are considered disorderly. I ask the minister to bring his remarks to a conclusion. Mr RIPPER: This side of the House will exercise financial discipline. We will not be windfall junkies!
I thank the member for some notice of this question. As it happens, I have received some advice from the Treasury. I seek the indulgence of the House because it is important information. If the Opposition listens carefully, it might hear the figure it has been seeking. The Under Treasurer has provided me with the following advice - As requested, this minute outlines the major factors behind the larger than estimated operating surplus for 2000/01. I should point out that the 2000/01 outcome is still being finalised and some variations can be expected before the estimates are firm. The following comments are more indicative of movements in major aggregates than would normally be the case when dealing with final estimates. The operating surplus for 2000/01 is currently estimated to be $268 million which compares with the budget time estimate of $42 million and the estimate in the Pre-election Financial Projection Statement of $98 million. I want the Leader of the Opposition to keep listening because I shall give information about the one-off nature of that surplus. It is important for people’s understanding of the budget constraints on the Government. The advice continues - Expenses were approximately $531 million greater than the budget time estimate while revenues are in the order of $757 million higher. The growth in expenses was widely spread across agencies and a significant component (at least half) will have ongoing effects in future years. By comparison on the revenue side, a number of one-off factors were responsible for the higher than expected outcome. Specifically: $250 million in the form of dividends, tax equivalent payments and stamp duty revenues flowed into the budget from the sales of AlintaGas and the Westrail freight operations; $132 million from the oil price averaging $US29.90 over the year compared with the budget time estimate of $US22; The Opposition does not want to listen to this, but it should because it will get a lesson in economics from the Under Treasurer - $95 million from the exchange rate averaging $A/$US53.8c over the year compared with the budget time estimate of $A/$US60.5c; and other one-off revenue increases of around $100 million which included $27.5 million from diamond royalties, $25 million from unanticipated share and conveyance duty, and $30 million additional interest income associated with the temporary investment of proceeds from the two asset sales and delays in some capital programs. I know this is a long answer but it is important that the House understand what it means for the future. The member opposite says that if the Government gets a windfall one year it can increase expenditure in the next. That can happen only if there are new windfalls. The Under Treasurer deals with that particular issue - Of these revenue increases, the two asset sales clearly will not be repeated - That is commonsense - one cannot privatise an asset twice - and the favourable outcomes associated with the oil price and exchange rate are unlikely to carry forward into the budget year or the out-years. For instance, the oil price has been easing over recent months and is currently at around $US25, and the exchange rate has been strengthening and is currently just below US53c. In both cases, the outlook is for movements which will not assist the revenue. He concludes with the following paragraph - The larger than estimated operating surplus has assisted in reducing the growth in debt, which will ease the interest burden by about $15 million a year. This is an appropriate use of such a surplus as to do otherwise would be to build expenses through the budget which are unlikely to be supported by revenue. Let me repeat that last sentence - This is an appropriate use of such a surplus as to do otherwise would be to build expenses through the budget which are unlikely to be supported by revenue. That is what the previous Government did. It built expenses through the forward years unsupported by revenue. This State has had a windfall, but it will not be repeated. We shall be fortunate if it is. We cannot privatise an asset twice. Several members interjected. The ACTING SPEAKER: Order, members! The cross conversations are considered disorderly. I ask the minister to bring his remarks to a conclusion. Mr RIPPER: This side of the House will exercise financial discipline. We will not be windfall junkies!
I should point out that the 2000/01 outcome is still being finalised and some variations can be expected before the estimates are firm. The following comments are more indicative of movements in major aggregates than would normally be the case when dealing with final estimates. The operating surplus for 2000/01 is currently estimated to be $268 million which compares with the budget time estimate of $42 million and the estimate in the Pre-election Financial Projection Statement of $98 million.
The operating surplus for 2000/01 is currently estimated to be $268 million which compares with the budget time estimate of $42 million and the estimate in the Pre-election Financial Projection Statement of $98 million.
The growth in expenses was widely spread across agencies and a significant component (at least half) will have ongoing effects in future years. By comparison on the revenue side, a number of one-off factors were responsible for the higher than expected outcome. Specifically: $250 million in the form of dividends, tax equivalent payments and stamp duty revenues flowed into the budget from the sales of AlintaGas and the Westrail freight operations; $132 million from the oil price averaging $US29.90 over the year compared with the budget time estimate of $US22;
By comparison on the revenue side, a number of one-off factors were responsible for the higher than expected outcome. Specifically: $250 million in the form of dividends, tax equivalent payments and stamp duty revenues flowed into the budget from the sales of AlintaGas and the Westrail freight operations; $132 million from the oil price averaging $US29.90 over the year compared with the budget time estimate of $US22;
$132 million from the oil price averaging $US29.90 over the year compared with the budget time estimate of $US22;
other one-off revenue increases of around $100 million which included $27.5 million from diamond royalties, $25 million from unanticipated share and conveyance duty, and $30 million additional interest income associated with the temporary investment of proceeds from the two asset sales and delays in some capital programs.
Several members interjected. The ACTING SPEAKER: Order, members! The cross conversations are considered disorderly. I ask the minister to bring his remarks to a conclusion. Mr RIPPER: This side of the House will exercise financial discipline. We will not be windfall junkies!
The ACTING SPEAKER: Order, members! The cross conversations are considered disorderly. I ask the minister to bring his remarks to a conclusion. Mr RIPPER: This side of the House will exercise financial discipline. We will not be windfall junkies!
Mr RIPPER: This side of the House will exercise financial discipline. We will not be windfall junkies!
Mr RIPPER replied: I thank the member for some notice of this question. As it happens, I have received some advice from the Treasury. I seek the indulgence of the House because it is important information. If the Opposition listens carefully, it might hear the figure it has been seeking. The Under Treasurer has provided me with the following advice - As requested, this minute outlines the major factors behind the larger than estimated operating surplus for 2000/01. I should point out that the 2000/01 outcome is still being finalised and some variations can be expected before the estimates are firm. The following comments are more indicative of movements in major aggregates than would normally be the case when dealing with final estimates. The operating surplus for 2000/01 is currently estimated to be $268 million which compares with the budget time estimate of $42 million and the estimate in the Pre-election Financial Projection Statement of $98 million. I want the Leader of the Opposition to keep listening because I shall give information about the one-off nature of that surplus. It is important for people’s understanding of the budget constraints on the Government. The advice continues - Expenses were approximately $531 million greater than the budget time estimate while revenues are in the order of $757 million higher. The growth in expenses was widely spread across agencies and a significant component (at least half) will have ongoing effects in future years. By comparison on the revenue side, a number of one-off factors were responsible for the higher than expected outcome. Specifically: $250 million in the form of dividends, tax equivalent payments and stamp duty revenues flowed into the budget from the sales of AlintaGas and the Westrail freight operations; $132 million from the oil price averaging $US29.90 over the year compared with the budget time estimate of $US22; The Opposition does not want to listen to this, but it should because it will get a lesson in economics from the Under Treasurer - $95 million from the exchange rate averaging $A/$US53.8c over the year compared with the budget time estimate of $A/$US60.5c; and other one-off revenue increases of around $100 million which included $27.5 million from diamond royalties, $25 million from unanticipated share and conveyance duty, and $30 million additional interest income associated with the temporary investment of proceeds from the two asset sales and delays in some capital programs. I know this is a long answer but it is important that the House understand what it means for the future. The member opposite says that if the Government gets a windfall one year it can increase expenditure in the next. That can happen only if there are new windfalls. The Under Treasurer deals with that particular issue - Of these revenue increases, the two asset sales clearly will not be repeated - That is commonsense - one cannot privatise an asset twice - and the favourable outcomes associated with the oil price and exchange rate are unlikely to carry forward into the budget year or the out-years. For instance, the oil price has been easing over recent months and is currently at around $US25, and the exchange rate has been strengthening and is currently just below US53c. In both cases, the outlook is for movements which will not assist the revenue. He concludes with the following paragraph - The larger than estimated operating surplus has assisted in reducing the growth in debt, which will ease the interest burden by about $15 million a year. This is an appropriate use of such a surplus as to do otherwise would be to build expenses through the budget which are unlikely to be supported by revenue. Let me repeat that last sentence - This is an appropriate use of such a surplus as to do otherwise would be to build expenses through the budget which are unlikely to be supported by revenue. That is what the previous Government did. It built expenses through the forward years unsupported by revenue. This State has had a windfall, but it will not be repeated. We shall be fortunate if it is. We cannot privatise an asset twice. Several members interjected. The ACTING SPEAKER: Order, members! The cross conversations are considered disorderly. I ask the minister to bring his remarks to a conclusion. Mr RIPPER: This side of the House will exercise financial discipline. We will not be windfall junkies!
I thank the member for some notice of this question. As it happens, I have received some advice from the Treasury. I seek the indulgence of the House because it is important information. If the Opposition listens carefully, it might hear the figure it has been seeking. The Under Treasurer has provided me with the following advice - As requested, this minute outlines the major factors behind the larger than estimated operating surplus for 2000/01. I should point out that the 2000/01 outcome is still being finalised and some variations can be expected before the estimates are firm. The following comments are more indicative of movements in major aggregates than would normally be the case when dealing with final estimates. The operating surplus for 2000/01 is currently estimated to be $268 million which compares with the budget time estimate of $42 million and the estimate in the Pre-election Financial Projection Statement of $98 million. I want the Leader of the Opposition to keep listening because I shall give information about the one-off nature of that surplus. It is important for people’s understanding of the budget constraints on the Government. The advice continues - Expenses were approximately $531 million greater than the budget time estimate while revenues are in the order of $757 million higher. The growth in expenses was widely spread across agencies and a significant component (at least half) will have ongoing effects in future years. By comparison on the revenue side, a number of one-off factors were responsible for the higher than expected outcome. Specifically: $250 million in the form of dividends, tax equivalent payments and stamp duty revenues flowed into the budget from the sales of AlintaGas and the Westrail freight operations; $132 million from the oil price averaging $US29.90 over the year compared with the budget time estimate of $US22; The Opposition does not want to listen to this, but it should because it will get a lesson in economics from the Under Treasurer - $95 million from the exchange rate averaging $A/$US53.8c over the year compared with the budget time estimate of $A/$US60.5c; and other one-off revenue increases of around $100 million which included $27.5 million from diamond royalties, $25 million from unanticipated share and conveyance duty, and $30 million additional interest income associated with the temporary investment of proceeds from the two asset sales and delays in some capital programs. I know this is a long answer but it is important that the House understand what it means for the future. The member opposite says that if the Government gets a windfall one year it can increase expenditure in the next. That can happen only if there are new windfalls. The Under Treasurer deals with that particular issue - Of these revenue increases, the two asset sales clearly will not be repeated - That is commonsense - one cannot privatise an asset twice - and the favourable outcomes associated with the oil price and exchange rate are unlikely to carry forward into the budget year or the out-years. For instance, the oil price has been easing over recent months and is currently at around $US25, and the exchange rate has been strengthening and is currently just below US53c. In both cases, the outlook is for movements which will not assist the revenue. He concludes with the following paragraph - The larger than estimated operating surplus has assisted in reducing the growth in debt, which will ease the interest burden by about $15 million a year. This is an appropriate use of such a surplus as to do otherwise would be to build expenses through the budget which are unlikely to be supported by revenue. Let me repeat that last sentence - This is an appropriate use of such a surplus as to do otherwise would be to build expenses through the budget which are unlikely to be supported by revenue. That is what the previous Government did. It built expenses through the forward years unsupported by revenue. This State has had a windfall, but it will not be repeated. We shall be fortunate if it is. We cannot privatise an asset twice. Several members interjected. The ACTING SPEAKER: Order, members! The cross conversations are considered disorderly. I ask the minister to bring his remarks to a conclusion. Mr RIPPER: This side of the House will exercise financial discipline. We will not be windfall junkies!
I should point out that the 2000/01 outcome is still being finalised and some variations can be expected before the estimates are firm. The following comments are more indicative of movements in major aggregates than would normally be the case when dealing with final estimates. The operating surplus for 2000/01 is currently estimated to be $268 million which compares with the budget time estimate of $42 million and the estimate in the Pre-election Financial Projection Statement of $98 million.
The operating surplus for 2000/01 is currently estimated to be $268 million which compares with the budget time estimate of $42 million and the estimate in the Pre-election Financial Projection Statement of $98 million.
The growth in expenses was widely spread across agencies and a significant component (at least half) will have ongoing effects in future years. By comparison on the revenue side, a number of one-off factors were responsible for the higher than expected outcome. Specifically: $250 million in the form of dividends, tax equivalent payments and stamp duty revenues flowed into the budget from the sales of AlintaGas and the Westrail freight operations; $132 million from the oil price averaging $US29.90 over the year compared with the budget time estimate of $US22;
By comparison on the revenue side, a number of one-off factors were responsible for the higher than expected outcome. Specifically: $250 million in the form of dividends, tax equivalent payments and stamp duty revenues flowed into the budget from the sales of AlintaGas and the Westrail freight operations; $132 million from the oil price averaging $US29.90 over the year compared with the budget time estimate of $US22;
$132 million from the oil price averaging $US29.90 over the year compared with the budget time estimate of $US22;
other one-off revenue increases of around $100 million which included $27.5 million from diamond royalties, $25 million from unanticipated share and conveyance duty, and $30 million additional interest income associated with the temporary investment of proceeds from the two asset sales and delays in some capital programs.
Several members interjected. The ACTING SPEAKER: Order, members! The cross conversations are considered disorderly. I ask the minister to bring his remarks to a conclusion. Mr RIPPER: This side of the House will exercise financial discipline. We will not be windfall junkies!
The ACTING SPEAKER: Order, members! The cross conversations are considered disorderly. I ask the minister to bring his remarks to a conclusion. Mr RIPPER: This side of the House will exercise financial discipline. We will not be windfall junkies!
Mr RIPPER: This side of the House will exercise financial discipline. We will not be windfall junkies!
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