Western Australia has posted a budget operating surplus of $5.7 billion.
WA Premier and Treasurer Mark McGowan announced the figure today when he handed down the budget for 2022-23 in State Parliament.
Mr McGowan’s second budget as Treasurer focusses on cost-of-living relief for West Australians, the State’s continued Covid-19 recovery and a boost for its embattled health system.
WA’s economy in 2022-23
The WA budget surplus comes on the back of strong iron ore and gas prices, a robust economy and a better GST deal.
WA is expected to continue to perform strongly in the coming financial year, with an operating surplus of $1.6 billion also forecast in 2022-2023.
Net debt is expected to fall for a third consecutive year to $29.9 billion at June 30, 2022, the first time since 2015 that net debt has been below $30 billion.
WA’s surplus compares to the $79.8 billion deficit announced by the Federal government in its budget in March and comes in a national environment where the Consumer Price Index rose 5.1 percent in the 12 months to March and the unemployment rate for Australia sat steady at 4 percent.
Mr McGowan told State Parliament his government was the only Australian government in surplus and paying down debt. “Our State drives the national economy,” he said.
What the budget means for strata
The budget has a range of tax reforms and incentives to boost housing and land supply, encourage urban infill and improve housing affordability, including:
Increasing the current off-the-plan transfer duty rebate to 100 percent for residential apartments in multi-storey developments valued below $500,000 from June 1, tapering to the existing 50 percent for apartments valued at $600,000 and above.
A new 50 percent land tax concession for eligible build-to-rent developments beginning on July 1, 2023.
A density bonus incentive for developments that include at least five percent social or community housing.
A new Keystart loan product to help people to buy medium and high-density residential units in Metronet precincts and priority urban infill areas.
Cost of living relief
The budget has several measures aimed at providing cost of living relief to West Australians who last month were faced with the highest quarterly inflation figures of all states and territories, 7.6 percent.
Reductions in electricity bills of $400, in the form of credits toward people’s electricity bills. (SCA WA will seek further information on how strata owners on embedded networks can access the credit).
A promised 3.8 percent decline in household fees and charges, including the impact of the credit, with increases being kept to below inflation.
Funding of $1.6 billion has been committed to pandemic response and recovery initiatives, including:
$237 million to support businesses including small business grants and industry assistance and relief.
$635 million to secure Rapid Antigen Tests (RATs) and run the WA Free RAT Program.
$537 million in health services including for COVID-19 testing and monitoring, medical equipment, contact tracing, hotel quarantine and the vaccination roll out
Motorists will be encouraged to buy electric or hydrogen fuel-cell cars with $3500 rebates as the WA government also moves to introduce a new tax on zero-emission vehicles. The sustainability moves include:
$60 million to a Clean Energy Car Fund, with up to 10,000 rebates offered at a cost of $36.5 million while a further $22 million will be spent on new charging infrastructure.
A distance-based road user charge for zero and low emission vehicles will be introduced from July 2027 to help fund the maintenance and construction of WA roads.
An extra $500 million for the Climate Action Fund which invests in sustainable jobs and industry.
Other budget highlights
With Exmouth identified as the best land-based place in the world to watch next year’s total solar eclipse, $19.3 million has been earmarked for the expected influx of visitors from overseas and interstate travelling to WA to watch the natural phenomenon.
An extra $223 million will be invested in health infrastructure, taking the total amount to be spent over the next four years to $1.6 billion
Projects supporting survivors of family and domestic violence and which hold perpetrators to account will receive $34.4 million.
An existing program that aims to steer at-risk youth away from the criminal justice system will receive an extra $11.1 million, with the program rolling out in nine more locations including Broome, Halls Creek, Fitzroy Crossing, Derby, Karratha, Newman, Carnarvon, Mandurah and Ellenbrook.
Research and development in WA’s agriculture sector will be given a $25 million injection. A new WAS Agricultural Collaboration will bring together the WA Department of Primary Industries and Regional Development with the CSIRO, UWA, Curtin University and Murdoch University.
$76.5 million in jobs training, including an extra $38.4 million to keep TAFE fees low and annual fee caps across 210 priority courses.
WA will spend $12 million over four years implementing a State-wide seismic survey to find hidden resources. The WA-Array program is said to be one of the largest of its kind undertaken anywhere in the world.