Western Australia Premier & Treasurer Colin Barnett
2009-10 Annual Report On State Finances
Victor P Taffa
The State Government has recorded a general Government sector operating surplus of $831 Million for 2009-10, $541 Million higher than estimated at the 2010-11 State Budget in May.
The surplus mainly reflects the net impact of:
- Higher royalties, mostly from iron ore (up $107 Million);
- Higher North West Shelf grants and other Commonwealth grants, such as for Non-government Schools (up $164 Million);
- Lower dividends and tax equivalent income from the State’s Public Corporations (down $141 Million);
- Lower than expected salaries expenditure, as the Government’s spending control measures began to have a more noticeable impact on employee costs (down $140 Million).
Premier Colin Barnett said the improved surplus was the result of the lowest underlying growth in salaries expenditure since 2000/01 and the recovery in the property market.
“The State Government’s sound financial management, combined with a faster than expected economic recovery, have ensured that the State’s finances remained firmly in the black in 2009/10.” Premier Barnett said.
Other highlights in the 2009-10 Annual Report on State Finances include:
- Record Infrastructure Investment (in hospitals, schools, roads, electricity infrastructure, etc) of $6.8 Billion. While this is $334 Million lower than the estimated out turn at the time of the 2010/11 State Budget, it is up $1.0 Billion on the previous record outcome in 2008/09;
- Total Public Sector net debt of $9.9 Billion at June 30, 2010, which is $1.5 Billion lower than expected in May 2010 but represents an increase of $3.2 Billion on the previous year.
Excluding extraordinary spending factors such as the on-passing of Commonwealth stimulus funding, general Government expenses grew by 7.7 % in underlying terms in 2009/10, which is the lowest rate of expense growth since 2005/06.
Of note, underlying growth in salaries expenditure was just 5.7 %, the lowest rate of growth since 2000/01. This can be attributed to a number of Government initiatives, including a ceiling on staffing numbers, voluntary severance schemes and the implementation of a new public sector wages policy.
- The ceiling on staff numbers has resulted in an improved focus on the measurement and management of employees across the public sector. In this regard, the Public Sector Commission’s June quarter report shows that the average level of full-time equivalent (FTE) employees in the year to June (102,863) is below the approved 2009/10 FTE ceiling (102,911);
- The Government also assisted 802 staff exit the Public Sector during 2009/10 under its voluntary severance programs, at a total cost of $80.5 Million.
“These are very positive outcomes achieved against a challenging year for the Western Australian Public Sector.” the Premier said.
After achieving a better than expected surplus for the 2009-10 financial year, Premier Barnett confirmed the Government would allocate $100 Million into a special trust fund to the New Children’s Hospital.
“I am very pleased that we will be able to set aside this money to pre-fund construction of the New Children’s Hospital as a result of our financial discipline over the past year.” the Premier said.
“This will be in addition to the $350 Million one-off payment from BHP Billiton and Rio Tinto to the New Children’s Hospital after the conclusion of the historic royalties’ agreement in June this year.” Premier Barnett said.
Construction on the New Children’s Hospital, which will have about 250 beds and the State’s only tertiary paediatric trauma centre, is scheduled to start in 2012 and be completed in 2015.