2005-06 BUDGET BUDGET OVERVIEW Delivering Our Commitments 2005–06 Budget Overview Contents Budget Highlights 3 Improving Services 8 Education and Training – Smarter, Skilled People 8 Quality Health Care 10 Improving Community Safety 13 Supporting Communities 17 Providing New Jobs 19 Economic Growth 19 Investing in Infrastructure 19 Tourism 21 Protecting Our Lifestyle 22 Protecting the Environment 22 Enhancing Communities 23 Strengthening Our Regions 26 2005-06 Budget Overview 1 Delivering Our Commitments 2 2005-06 Budget Overview 2005-06 Budget Highlights The 2005-06 Budget delivers a INVESTING IN A BETTER DEAL FOR better deal for families, invests INFRASTRUCTURE FAMILIES record amounts in State-building To secure long-term economic Raising a family in the modern infrastructure, provides further growth and opportunities for world can be tough. This is why this tax relief and boosts services in Western Australia, the Government year’s budget pays special attention key areas such as education and will continue to make a massive to easing the fi nancial burden on training. investment in State-building Western Australian families. Responsible fi nancial infrastructure. The 2005-06 Capital The State Government will deliver management – including the Works Program is the biggest on on its $112 million election pledge to delivery of a fi fth consecutive record with $4.7 billion committed to increase the concession for motor projects aimed at boosting services, surplus – allows the State vehicle registrations by $25. This creating jobs, protecting our lifestyle Government to meet these means the total family concession and strengthening our regions. objectives and fully fund increases to $53 per year – saving $1.1 billion worth of election Flagship works include almost families an extra $100 over four commitments outlined in the $600 million on the State’s electricity years. lead-up to the 2005 State system to improve the quality, Public transport fares for school Election. reliability and safety of electricity students will drop to 50 cents – no supply in both regional and matter how many zones students metropolitan areas; $715 million need to travel to get to and from on water infrastructure, including school. This initiative will cost the $315 million on the Perth Seawater Government $11.4 million during this Desalination Project; $101 million term. on Western Australia’s ports; and $302 million on improving and Another education initiative will see expanding State and local road parents receive up to $400 for every networks. 16 or 17 year old student completing education and training. We will also be building more schools, more hospitals and more In terms of fees and charges, the police stations to meet the needs of State Government will continue to our growing population. minimise the cost of living for Western Australian households. In 2005-06, the Government will remove, reduce or freeze a number of key tariffs, fees and charges that impact on every household’s bottom line. 2005-06 Budget Overview 3 2005-06 Budget Highlights Continued There will be no increase in electricity ■ exempting loan refi nancings TAX COMPETITIVENESS prices for the fi fth consecutive year undertaken by homeowners and General Government Taxation Revenue as a Share of GSP (a) and compulsory third party insurance small businesses from mortgage Percent premiums and stamp duty rates on duty, from 1 January 2006. This 6 measure will ensure that Western insurance will remain unchanged. As Western Australia Weighted Average of Other States a result of these decisions, spending Australian homebuyers and small 5 by the ‘representative household’ businesses can access the most competitive fi nancing packages, on the basket of State Government 4 goods and services will decrease particularly in an environment of by $80.74. This equates to a 2.5% interest rate uncertainty; and 3 decrease on the previous year’s ■ changing the TAB betting tax expenditure and is signifi cantly from 4.5% of TAB turnover below the forecast infl ation rate to 21% of gross margin from 2 of 2.5%. For a pensioner eligible 1 July 2007 (equivalent to a tax for concessions, the decrease is rate of 3.5% on turnover). 1 expected to be $75.94. Together with the abolition of debits tax and the family concession/ 0 2005-06 2006-07 2007-08 2008-09 MORE TAX RELIEF payments measures being funded in the 2005-06 Budget, the tax relief Following $1.5 billion worth of tax and family concessions/payments are (a) cuts announced last year, the State Taxation revenue estimates for other worth a total of $870 million over the jurisdictions are based on the most recent Government will continue its tax relief published estimates as of 19 May 2005. next four years. program by delivering new measures in 2005-06. These new measures include: ■ targeted adjustment of the land SUMMARY OF TAX RELIEF AND OTHER CONCESSIONS tax scale from 1 July 2005 to free 2005-06 2006-07 2007-08 2008-09 around 24,000 (or 20% of) land $m $m $m $m tax payers from land tax as well TAX RELIEF MEASURES as cutting liabilities for all other Adjustment to land tax scale -54.5 -58.3 -62.4 -66.8 land tax payers compared to 50% land tax concession for caravan parks -1.0 -1.0 -1.1 -1.2 what they would otherwise have Stamp duty exemption for mortgage refi nancing -6.2 -13.1 -13.9 -14.7 paid; TAB betting tax changes – – -11.0 -11.5 providing a 50% land tax ■ Debits tax abolition -88.0 -96.0 -96.0 -96.0 concession for caravan $25 increase in family vehicle concession for registration -26.3 -27.3 -28.5 -29.8 parks from 1 July 2005. The concession will help to ensure OTHER CONCESSIONS/PAYMENTS that Western Australian families 50 cent fares -2.3 -3.0 -3.0 -3.1 can continue to access low-cost New learning allowance -13.6 -13.7 -14.3 -14.3 accommodation in the State’s TOTAL VALUE OF TAX RELIEF AND FAMILY prime holiday destinations; CONCESSIONS/PAYMENTS -191.9 -212.4 -230.2 -237.4 4 2005-06 Budget Overview RESPONSIBLE FINANCIAL Achieving Surpluses Managing Debt MANAGEMENT The 2005-06 Budget projects Reflecting the Government’s record Responsible financial management operating surpluses in each year of investment in economic and social and the State Government’s the forward estimates period. This infrastructure across the State, total commitment to delivering balanced meets the Government’s commitment public sector net debt is estimated budgets underpins the 2005-06 to sustainable financial management. to increase to $7.8 billion by Budget. A balanced budget provides For 2005-06, a general government 30 June 2009, up from an estimated the Government with the ability to operating surplus of $521 million $5.2 billion at 30 June 2005. invest in infrastructure, provide a is forecast, following an estimated The forecast operating surpluses better deal for families and boost surplus of $631 million for the current across the forward estimates funding in key service areas. financial year. are crucial in keeping net debt at The forecast surplus for 2005-06 is affordable and sustainable levels. the Government’s fifth consecutive They reduce the need for new operating surplus. borrowings to fund capital works. In this regard, the net debt to revenue These surpluses have and will ratio for the total non-financial public continue to provide a major source sector — a key ratio for the State’s of funding for Western Australia’s credit rating — is forecast to remain Capital Works Program. They also comfortably below the target limit provide Government with the flexibility of 47%. Net debt as a share of the to respond to emerging demands economy is forecast to remain at and adverse economic developments historically modest levels. outside of the Government’s control. This enables a sustainable debt NET DEBT AS A SHARE OF position to be achieved in both the GROSS STATE PRODUCT short and long term. Total Public Sector Percent NET OPERATING BALANCE 20 Forecast General Government Sector 18 $ Million 900 16 Forecast 14 700 12 500 10 8 300 6 100 4 -100 2 0 -300 1994 1996 1998 2000 2002 2004 2006 2008 -500 1993-94 1995-96 1997-98 1999-00 2001-02 2003-04 2005-06 2007-08 2005-06 Budget Overview 5 2005-06 Budget Highlights Continued Sustainable Growth in Spending EDUCATION AND TRAINING training mentors over the next four years; and General government expenses are Education and training is a key extra cost relief for low-income projected to increase by 4.1% (or priority for this Government in its ■ families or families who live in $539 million) in 2005-06, and by an second term. During the next four remote locations. average 3.3% per annum across the years an additional $337.4 million forward estimates period. These has been provided to meet the Other key initiatives will include rates of growth are consistent with Government’s election commitments. putting more computers in schools the Government’s target of limiting ($29.5 million), tackling the skills During this term, more than $1 billion own-purpose expense growth to no shortage ($21.4 million), improving will be spent on capital works and more than the combined growth in student behaviour ($7.6 million), maintenance in the area of education population and infl ation. and raising literacy and numeracy and training. standards ($8.4 million). Similar to previous years, the majority During the next year, the State of new initiatives in 2005-06 take The State Government will also Government will spend more than place in the core areas of education re-establish Perth Modern School $225 million on government schools and training, health and public order as the State’s premier school of and TAFE college infrastructure, and safety.