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2008-09 Budget Paper 3

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2008-09 Budget Paper 3 2008–09 BUDGET ECONOMIC AND FISCAL OUTLOOK Budget Paper No. 3 PRESENTED TO THE LEGISLATIVE ASSEMBLY ON 8 MAY 2008 2008–09 Economic and Fiscal Outlook © Government of Western Australia Excerpts from this publication may be reproduced, with appropriate acknowledgement, as permitted under the Copyright Act. For further information please contact: Department of Treasury and Finance 197 St Georges Terrace Perth WA 6000 Telephone: +61 8 9222 9222 Facsimile: +61 8 9222 9117 Website: http://ourstatebudget.wa.gov.au Published May 2008 John A. Strijk, Government Printer ISSN 1448–2630 2008-09 BUDGET ECONOMIC AND FISCAL OUTLOOK TABLE OF CONTENTS UNDER TREASURER’S CERTIFICATION i CHAPTER 1: 2008-09 ECONOMIC AND FISCAL OUTLOOK – OVERVIEW Fiscal Outlook .................................................................................................................... 1 Revenue Outlook.............................................................................................................. 2 Key Areas of Expenditure ................................................................................................ 4 Capital Works Program............................................................... ..................................... 6 Economic Outlook.......................................................................................................... ... 8 CHAPTER 2: FISCAL STRATEGY AND FINANCIAL PROJECTIONS Overview........................................................................................................................... 11 Fiscal Strategy .................................................................................................................. 12 Financial Targets........................................................................................................... 12 Summary of Financial Projections ............................................................................... 21 General Government Sector........................................................................................ 21 Summary.................................................................................................................................. 21 Operating Statement................................................................................................................ 22 Revenue ................................................................................................................................................ 25 Expenses ............................................................................................................................................... 27 Capital Investment .............................................................................................................................. 30 Balance Sheet............................................................................................................................ 31 Cash Flow Statement................................................................................................................ 32 Total Public Sector........................................................................................................ 32 Summary.................................................................................................................................. 32 Operating Statement............................................................................................................................. 32 Capital Investment ................................................................................................................... 33 Net Debt......................................................................................................................... 35 Issues in Public Sector Finances................................................................................... 39 Infrastructure Provision, Funding and Strategy ..................................................................... 39 Statement of Risks........................................................................................................... 48 Estimating Assumption............................................................................................... 48 Revenue Estimates ....................................................................................................... 49 Expenses ........................................................................................................................ 51 Capital Works ............................................................................................................... 52 Contingent Liabilities................................................................................................... 53 CHAPTER 3: GENERAL GOVERNMENT REVENUE Overview........................................................................................................................... 55 Revenue Relief Measures .............................................................................................. 60 Taxation Revenue Estimates.......................................................................................... 70 Commonwealth Grants .................................................................................................. 75 Mining Revenue .............................................................................................................. 83 Other Revenue ................................................................................................................. 86 CHAPTER 4: GENERAL GOVERNMENT EXPENSES Overview........................................................................................................................... 89 Policy Decisions Affecting Expense (by Portfolio)................................................... 96 Summary........................................................................................................................ 96 Premier; Minister for Federal State-Relations; Trade; Innovation; Science; Public Sector Management..................................................................... 99 Deputy Premier; Treasurer; Minister for State Development.............................. 101 Minister for Agriculture and Food; Forestry; Mid West and Wheatbelt; Great Southern.................................................................................. 104 Minister for Local Government; Racing and Gaming; Multicultural Interests and Citizenship; Government Enterprises; Minister Assisting the Minister for Planning and Infrastructure; Goldfields-Esperance; Youth.............................................................................. 104 Minister for Police and Emergency Services; Community Safety; Water Resources; Sport and Recreation ............................................................ 105 Attorney General; Minister for Health; Electoral Affairs ..................................... 108 Minister for Housing and Works; Indigenous Affairs, Heritage; Land Information ........................................................................................................... 111 Minister for Planning and Infrastructure................................................................ 114 Minister for Disabilities Services; Tourism; Culture and the Arts; Consumer Protection ........................................................................................... 116 Minister for Education and Training; South West................................................. 118 Minister for Energy; Resources; Industry and Enterprise .................................... 121 Minister for Employment Protection; Regional Development, Fisheries; the Kimberley, Pilbara and Gascoyne.............................................. 123 Minister for Corrective Services; Small Business................................................... 124 Minister for Environment; Climate Change; Peel.................................................. 126 Minister for Child Protection; Community; Women’s Interest; Senior and Volunteering.................................................................................................. 128 CHAPTER 5: CAPITAL INVESTMENT Overview......................................................................................................................... 131 Cost and Demand Pressures ..................................................................................... 131 Major Initiatives.......................................................................................................... 132 Capital Works Program ................................................................................................ 134 Summary...................................................................................................................... 134 Capital Works Policy Decisions................................................................................ 136 CHAPTER 6: THE WESTERN AUSTRALIAN ECONOMY Overview......................................................................................................................... 153 International Conditions.............................................................................................. 158 State Final Demand....................................................................................................... 158 Household Consumption.......................................................................................... 158 Business Investment..................................................................................................
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