❓ Mr. Wyatt questions the Treasurer on the removal of a financial target from the 2013-14 budget and the introduction of new targets. The Treasurer responds by explaining the changes were made based on advice from ratings agencies to ensure financial sustainability.
AnsweredQoN 444Legislative Assembly
QuestionView source ↗
STATE BUDGET 2013–14 — FINANCIAL
TARGETS
444. Mr B.S. WYATT to the Treasurer:
I note that one of the financial
targets for each of the 2008–09, 2009–10, 2010–11, 2011–12
and 2012–13 budgets was to ensure that real per capita own-purpose
general government expenses did not increase.
(1) Why has this financial target
been removed from the 2013–14 budget?
(2) Of the five financial targets, why are four of them new?
TARGETS
444. Mr B.S. WYATT to the Treasurer:
I note that one of the financial
targets for each of the 2008–09, 2009–10, 2010–11, 2011–12
and 2012–13 budgets was to ensure that real per capita own-purpose
general government expenses did not increase.
(1) Why has this financial target
been removed from the 2013–14 budget?
(2) Of the five financial targets, why are four of them new?
AnswerView source ↗
I was hoping the member for Victoria Park would not ask that
question, because in my haste to get back from the airport, I had to borrow one
of my staff's suit jackets, which is incredibly tight! I am unable to
move most of the top half of my body, so if I appear a tad robotic —
Mr B.S. Wyatt : I
think it's yours from six months ago!
Mr T.R. BUSWELL :
It was a size I passed through briefly!
(1)–(2)
I want to talk about the financial targets; it is actually a little-read, but
very important part of the budget papers. One of the reasons I became interested
in it is that when we were in opposition, the then government changed it a
number of times.
Mr B.S. Wyatt : A
number of times? Once.
Mr T.R. BUSWELL :
Once—around tax.
Mr B.S. Wyatt : Not
all of them! Four out of five!
The SPEAKER :
Member for Victoria Park!
Mr T.R. BUSWELL : I
want to tell members why we changed the financial targets. The one the member
is talking about related to real per capita expense growth. One of the reasons
we changed them followed serious consideration acting on the advice given to us
last year by the ratings agencies. If the member goes back and has a look at
the commentary passed by the ratings agencies last Thursday after the budget,
one of them—I cannot remember which—reflected positively on the
changes made to the financial targets. Why is that? We have attempted to set
financial targets that do a couple of things. Firstly, they make sure that we
live within our means in terms of the difference between the rate of growth of
spending and the rate of growth of revenue. A very important reference is made
to the rate of growth of spending being kept at a level lower than the rate of
growth of revenue. That to me sounds like a very sound financial target to help
deliver sustainable state finances.
The second issue we are attempting to address with the
revised financial targets is to make sure that we increase our capacity to fund
our investments from our own sources—effectively from our surpluses or
from the retained profits of our trading entities. Again, I think this is a
very, very important aspect of maintaining state financial sustainability.
The third change relates to making sure that the financial
targets keep us focused on long-term debt. Long-term debt presents as an issue
to the government, and it is incredibly important that we focus on it. The
member for Victoria Park might also note that, in reporting against those
financial targets, we have achieved hardly any of them this year.
Mr B.S. Wyatt : I
have noted.
Mr T.R. BUSWELL :
We achieved hardly any of them. It would have been easy for us to have selected
easy financial targets and just ticked the boxes; that would have been the easy
thing to do—to choose easy financial targets, tick the boxes and say, ''Job
well done''. We did not do that.
Mr B.S. Wyatt interjected.
The SPEAKER :
Member for Victoria Park, I call you to order for the second time.
Mr T.R. BUSWELL :
We did not do that. We have adopted what I think are important, contemporary
financial targets for this state that address the key concerns of living within
our means, making sure that we use as much of our own money as we can to pay
for our infrastructure and, finally, managing long-term debt.
question, because in my haste to get back from the airport, I had to borrow one
of my staff's suit jackets, which is incredibly tight! I am unable to
move most of the top half of my body, so if I appear a tad robotic —
Mr B.S. Wyatt : I
think it's yours from six months ago!
Mr T.R. BUSWELL :
It was a size I passed through briefly!
(1)–(2)
I want to talk about the financial targets; it is actually a little-read, but
very important part of the budget papers. One of the reasons I became interested
in it is that when we were in opposition, the then government changed it a
number of times.
Mr B.S. Wyatt : A
number of times? Once.
Mr T.R. BUSWELL :
Once—around tax.
Mr B.S. Wyatt : Not
all of them! Four out of five!
The SPEAKER :
Member for Victoria Park!
Mr T.R. BUSWELL : I
want to tell members why we changed the financial targets. The one the member
is talking about related to real per capita expense growth. One of the reasons
we changed them followed serious consideration acting on the advice given to us
last year by the ratings agencies. If the member goes back and has a look at
the commentary passed by the ratings agencies last Thursday after the budget,
one of them—I cannot remember which—reflected positively on the
changes made to the financial targets. Why is that? We have attempted to set
financial targets that do a couple of things. Firstly, they make sure that we
live within our means in terms of the difference between the rate of growth of
spending and the rate of growth of revenue. A very important reference is made
to the rate of growth of spending being kept at a level lower than the rate of
growth of revenue. That to me sounds like a very sound financial target to help
deliver sustainable state finances.
The second issue we are attempting to address with the
revised financial targets is to make sure that we increase our capacity to fund
our investments from our own sources—effectively from our surpluses or
from the retained profits of our trading entities. Again, I think this is a
very, very important aspect of maintaining state financial sustainability.
The third change relates to making sure that the financial
targets keep us focused on long-term debt. Long-term debt presents as an issue
to the government, and it is incredibly important that we focus on it. The
member for Victoria Park might also note that, in reporting against those
financial targets, we have achieved hardly any of them this year.
Mr B.S. Wyatt : I
have noted.
Mr T.R. BUSWELL :
We achieved hardly any of them. It would have been easy for us to have selected
easy financial targets and just ticked the boxes; that would have been the easy
thing to do—to choose easy financial targets, tick the boxes and say, ''Job
well done''. We did not do that.
Mr B.S. Wyatt interjected.
The SPEAKER :
Member for Victoria Park, I call you to order for the second time.
Mr T.R. BUSWELL :
We did not do that. We have adopted what I think are important, contemporary
financial targets for this state that address the key concerns of living within
our means, making sure that we use as much of our own money as we can to pay
for our infrastructure and, finally, managing long-term debt.
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