Western Australian Treasurer Ben Wyatt has released the state’s 2017-18 budget, promising a number of measures designed to get the state “back on track.”
Net debt for the state – currently at $37.8 billion – is forecasted to reach $43.8 billion by 2019-20, and announcing the first WA labour budget in nine years, Wyatt laid most of the blame at the feet of the previous government.
“Whilst this Budget is about the future direction of the McGowan Labor Government, it is of course bound and influenced by the period of the former Government. The fiscal circumstances we have inherited will be, unfortunately, a not insignificant part of the narrative of many future Budgets,” he said in a speech.
In answer to this ballooning debt the new budget includes a $3.5 billion package of Budget repair measures. Check out what this means for some of the key players below:
Wyatt said households would be expected to contribute less than 9% of the total budgetary repair measures, and most of the changes affecting WA households already came into effect from July. These included:
- A $169 increase to annual household electricity bills
- A 6% increase in water, sewerage and drainage costs
- A 1.8% hike in standard fares for public transport
- A 3.35% increase to the Emergency Services Levy
Foreign property buyers
Foreign property investors will be slugged with a 4% surcharge on residential property purchases from January 2019. This is expected to raise $49 million for the government, but has attracted concern from property and real estate groups in the state, who are concerned the scheme might halt overseas investment activity and impact what is already a relatively flat property market.
Aussie property buyers escaped unscathed, with the first home buyer scheme left untouched and no increases to other property taxes.
Wyatt also pointed out that the GST had failed to provide the returns expected and needed by Western Australia.
“The bottom line with the GST is that it does not, and has not for a long time, adequately recognised Western Australia’s spending requirements, and it has unfairly discriminated against our royalty revenues,” he said.
In response to this problem, the Government is considering a state-based bank levy, similar to the much-debated levy implemented in SA earlier in the year, which was expected to earn the state $370 million over four years.
Businesses with a large payroll came into the firing line, hit with a progressive payroll tax hike. Those with a payroll between $500 million and $1.5 billion will see their payroll taxed at 6%, up from the previous 5.5%. Really big players with payrolls in excess of $1.5 billion are set to pay tax at a rate of 6.5%.
Wyatt said less than 1% of businesses in Western Australia will wind up paying the higher tax.
“Around one-fifth of the additional revenue generated from this measure is expected to be paid by the larger iron ore producers in the State,” he said.
The hike is expected to raise $435 million in revenue over four years and becomes effective from June next year, though the Government says it will be a temporary measure.
Aussies love a punt, and WA has taken steps to protect the local TAB by introducing a 15% gambling tax to online betting services. It will reportedly be based on a model already introduced in South Australia, but full details are yet to be released.
Inspired to bet your own budget into order now that the WA state budget has been released? Head over to our budget calculator to crunch the numbers on your personal finances.