2004–05 BUDGET ECONOMIC AND FISCAL OUTLOOK PRESENTED TO THE LEGISLATIVE ASSEMBLY ON 6 MAY 2004 Budget Paper No. 3 2004–05 Budget Paper set includes: Budget Paper No. 1 – Budget Speech Budget Paper No. 2 – Budget Statements (Volumes 1–3) Budget Paper No. 3 – Economic and Fiscal Outlook Budget Overview Reader’s Guide to the 2004–05 Budget Statements 2004–05 BUDGET ECONOMIC AND FISCAL OUTLOOK PRESENTED TO THE LEGISLATIVE ASSEMBLY ON 6 MAY 2004 Budget Paper No. 3 2004–05 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 George’s Terrace Perth WA 6000 Telephone:+61 8 9222 9222 Facsimile: +61 8 9222 9117 Website: http://ourstatebudget.wa.gov.au Published May 2004 John A. Strijk, Government Printer ISSN 1448–2630 2004-05 BUDGET ECONOMIC AND FISCAL OUTLOOK TABLE OF CONTENTS UNDER TREASURER’S CERTIFICATION i CHAPTER 1: ECONOMIC AND FISCAL OUTLOOK – OVERVIEW 1 Fiscal Outlook .................................................................................................................... 1 Key Areas of Expenditure ................................................................................................ 3 Capital Investment............................................................... ............................................. 4 Economic Outlook.......................................................................................................... ... 6 CHAPTER 2: FISCAL STRATEGY AND FINANCIAL PROJECTIONS 9 Overview............................................................................................................................. 9 Fiscal Strategy .................................................................................................................. 10 Financial Targets........................................................................................................... 10 Summary of Financial Projections ............................................................................... 15 General Government Sector........................................................................................ 17 Summary...................................................................................................................................17 Operating Statement.................................................................................................................18 Revenue ................................................................................................................................................ 21 Expenses ............................................................................................................................................... 22 Balance Sheet.............................................................................................................................27 Cash Flow Statement.................................................................................................................28 Total Public Sector........................................................................................................ 29 Summary...................................................................................................................................29 Public Non-Financial Corporations ..........................................................................................30 Public Financial Corporations...................................................................................................30 Capital Investment ....................................................................................................... 30 Net Debt......................................................................................................................... 32 Total Public Sector ....................................................................................................................32 General Government .................................................................................................................34 Public Non-Financial Corporations ..........................................................................................34 Public Financial Corporations...................................................................................................34 Statement of Risks........................................................................................................... 34 Estimating Assumptions ........................................................................................... ..35 Revenue Estimates ..................................................................................................... ..35 Expenses ....................................................................................................................... .39 Capital Works .............................................................................................................. .39 Contingent Liabilities.................................................................................................. .40 Issues in Public Sector Finances................................................................................... 41 A Comparison of General Government Net Operating Surpluses ....................... 41 CHAPTER 3: FINANCIAL PROJECTIONS – EXPENDITURE 51 Overview.......................................................................................................................... .51 Expenses by General Government Agencies ............................................................ .51 Premier; Minister for Public Sector Management; Federal Affairs; Science; Citizenship and Multicultural Interests .............................................................. 52 Deputy Premier; Treasurer; Minister for Energy..................................................... 54 Minister for Agriculture; Forestry and Fisheries; The Mid-West, Wheatbelt and Great Southern ................................................................................................ 56 Minister for Local Government and Regional Development; Heritage; The Kimberley, Pilbara and Gascoyne; Goldfields-Esperance ....................... 58 Minister for Consumer and Employment Protection; Indigenous Affairs; Minister Assisting the Minister for Public Sector Management...................... 59 Attorney General; Minister for Health; Electoral Affairs ....................................... 60 Minister for the Environment..................................................................................... 67 Minister for Police and Emergency Services; Justice; Community Safety ........... 69 Minister for Planning and Infrastructure.................................................................. 72 Minister for State Development ................................................................................. 73 Minister for Education and Training......................................................................... 74 Minister for Community Development; Women’s Interests, Seniors and Youth; Disability Services; Culture and the Arts ....................................... 76 Minister for Tourism; Small Business; Sport and Recreation; Peel and the South West ................................................................................................ 78 Minister for Housing and Works; Racing and Gaming; Government Enterprises; Land Information ............................................................................. 80 Public Sector Capital Investment ................................................................................. 81 Premier; Minister for Public Sector Management; Federal Affairs; Science; Citizenship and Multicultural Interests .............................................................. 83 Deputy Premier; Treasurer; Minister for Energy..................................................... 83 Minister for Agriculture; Forestry and Fisheries; The Mid-West, Wheatbelt and Great Southern ................................................................................................ 84 Minister for Local Government and Regional Development; Heritage; The Kimberley, Pilbara and Gascoyne; Goldfields-Esperance ....................... 85 Attorney General; Minister for Health; Electoral Affairs ....................................... 86 Minister for the Environment..................................................................................... 89 Minister for Police and Emergency Services; Justice; Community Safety ........... 90 Minister for Planning and Infrastructure.................................................................. 92 Minister for State Development ................................................................................. 97 Minister for Education and Training......................................................................... 97 Minister for Community Development; Women’s Interests, Seniors and Youth; Disability Services; Culture and the Arts ....................................... 99 Minister for Tourism; Small Business; Sport and Recreation; Peel and the South West ................................................................................................ 99 Minister for Housing and Works; Racing and Gaming; Government Enterprises; Land Information ........................................................................... 100 CHAPTER 4: FINANCIAL PROJECTIONS – REVENUE