❓ Dr. Thomas questions the Treasurer on the use of the debt reduction account, alleging funds were spent on normal government activities instead of debt repayment. The Minister defends the government's debt reduction record, contrasting it with the previous Liberal-National government.
AnsweredQoN 1151Legislative Council
QuestionView source ↗
STATE FINANCES —
DEBT REDUCTION ACCOUNT
1151. Hon Dr STEVE THOMAS to the minister representing the
Treasurer:
I refer to Labor's 2017
election commitment that promised that ''a McGowan Labor government will
protect future iron ore windfalls from being exploited by future governments,
by bringing in laws to allocate 50 per cent of iron ore royalties into a new debt reduction account'', and to
evidence given to the Standing Committee on Estimates and Financial
Operations yesterday that of the $2.7 billion that cycled through the debt
reduction account in 2021–22, only $589 million was actually used to
pay down existing debt.
(1) Was the other
$2.1 billion in the account simply spent in 2021–22 on normal
government activity and is it now being described conveniently as an ''alternate
source of funding''?
(2) Is the
commitment to allocate 50 per cent of iron ore royalties to the debt reduction
account dead in the water, and thus represents another broken Labor promise?
(3) Given that,
even with this broken promise, $6.1 billion has passed through the debt
reduction account over the last four years, why had the government reduced
actual total public sector net state debt from $32 billion when it came to
government in 2017 to only $29 billion by the end of 2021–22?
DEBT REDUCTION ACCOUNT
1151. Hon Dr STEVE THOMAS to the minister representing the
Treasurer:
I refer to Labor's 2017
election commitment that promised that ''a McGowan Labor government will
protect future iron ore windfalls from being exploited by future governments,
by bringing in laws to allocate 50 per cent of iron ore royalties into a new debt reduction account'', and to
evidence given to the Standing Committee on Estimates and Financial
Operations yesterday that of the $2.7 billion that cycled through the debt
reduction account in 2021–22, only $589 million was actually used to
pay down existing debt.
(1) Was the other
$2.1 billion in the account simply spent in 2021–22 on normal
government activity and is it now being described conveniently as an ''alternate
source of funding''?
(2) Is the
commitment to allocate 50 per cent of iron ore royalties to the debt reduction
account dead in the water, and thus represents another broken Labor promise?
(3) Given that,
even with this broken promise, $6.1 billion has passed through the debt
reduction account over the last four years, why had the government reduced
actual total public sector net state debt from $32 billion when it came to
government in 2017 to only $29 billion by the end of 2021–22?
AnswerView source ↗
(1)–(3) The
debt reduction account is used to pay back borrowings and reduce the need for
new borrowings. As Hon Dr Steve Thomas has previously acknowledged, the McGowan
government inherited a budget with net debt heading to $43.7 billion. Since
coming to government, we have reduced debt by a third, to $29.2 billion.
Several members
interjected.
Hon
STEPHEN DAWSON : In 2021–22 alone, net debt reduced by $4.3
billion—the largest decline in debt on record.
Hon Dr Steve Thomas interjected.
The PRESIDENT : Order!
Let the member answer the question.
Hon STEPHEN DAWSON : Thanks,
President.
In contrast, the previous Liberal–National
government did not reduce net debt at any point during its term. Western Australia
is the only state in Australia in which debt is declining, with three
consecutive years of reduction and net debt at its lowest level since 2014–15.
debt reduction account is used to pay back borrowings and reduce the need for
new borrowings. As Hon Dr Steve Thomas has previously acknowledged, the McGowan
government inherited a budget with net debt heading to $43.7 billion. Since
coming to government, we have reduced debt by a third, to $29.2 billion.
Several members
interjected.
Hon
STEPHEN DAWSON : In 2021–22 alone, net debt reduced by $4.3
billion—the largest decline in debt on record.
Hon Dr Steve Thomas interjected.
The PRESIDENT : Order!
Let the member answer the question.
Hon STEPHEN DAWSON : Thanks,
President.
In contrast, the previous Liberal–National
government did not reduce net debt at any point during its term. Western Australia
is the only state in Australia in which debt is declining, with three
consecutive years of reduction and net debt at its lowest level since 2014–15.
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