Western Australia Minister for Finance Simon O’Brien
No Labor-Style Tax Binge Under Liberal-National Government
Victor P Taffa
Finance Minister Simon O’Brien today countered misconceptions about the State’s finances by highlighting the $2.6 Billion shortfall in State tax revenue the Liberal-National Government has faced since the 2008 election.
“The Opposition is suggesting that this Government is presiding over a Labor-style revenue bonanza that was a product of having both the resource and domestic sectors growing strongly and paying higher taxes due to Labor’s first three Budgets containing significant tax rises. This certainly is not the case now.” Mr. O’Brien said.
“The State Government was hit by the impact of the Global Financial Crisis almost as soon as we were elected with the consequences of seeing State revenue forecasts cut dramatically.”
“Comparing Treasury’s pre-election State tax estimates with the record so far, shows State tax lagging by more than $2.6 Billion behind the pre-election estimates.” Mr. O’Brien said.
“The impact of the crisis caused State tax revenue to fall dramatically in 2008-09 – falling $736 Million or 11.4 % below the 2007-08 revenue (Labor’s last year).
“Three years on, we may see State tax revenue recover to those levels.” Mr. O’Brien said.
The Minister said despite the welcome economic recovery during 2009-10, State tax revenue remained below the 2007-08 level. The Mid-Year Report for the current year has State tax recovering further in 2010-11 but only just reaching the 2007-08 level, with the risk the Government may not reach the forecast figure.
“The significance of these figures cannot be dismissed by Labor’s political posturing. The figures show we have managed the business of Government despite State tax revenue below what it was three years ago, in Labor’s last year.” Mr. O’Brien said.
“This is a tremendous achievement as Governments generally do not face tax revenue lower than in previous years, and rarely would any Government have faced three years of tax revenue remaining below its previous level.”
“The crisis and subsequent slump in State tax created these circumstances but the Government did not resort to a tax binge.” Mr. O’Brien said.
“Contrast our record with the Labor Party which went on a tax binge in its first three consecutive Budgets despite no crisis and having been gifted a State Budget in the best shape since the 1960’s.”
“Managing the State’s finances well is a precursor to good government. Everything the Government wants to do and community expects depends on our financial capacity. That is why the Liberal Party always has and always will be the better government choice for the community.” Mr. O’Brien said.