WA backs off tax pledge
WA’s Labor Government has, as many predicted, broken its promise not to impose new taxes in its first state budget.
Treasurer Ben Wyatt has made a bold play to bring WA's budget back to surplus by 2021, slugging big businesses with a payroll tax rise and hitting gold miners with higher royalties.
The public service will be asked to find thousands of voluntary redundancies, while local governments and regional centres will suffer due to steep cuts to the Royalties for Regions program.
WA's budget is predicted to be $2.3 billion in the red this financial year, with deficits above $1 billion predicted each year, and debt hitting $43.8 billion by 2020, before a forecast return to surplus in 2020-21.
Premier Mark McGowan says revenue write-downs forced him to break his pre-election pledge not to increase taxes, and lift payroll tax on companies that pay staff over $100 million per year.
“We are sorry about that, I am sorry; it hasn't been easy,” he said.
There will be a 6 per cent payroll tax rise for about 1,300 companies with payrolls worth between $100 million and $1.5 billion, and 6.5 per cent for any that pay over $1.5 billion.
The Government insists the measure will only last for five years, raising $435 million over that time.
The Treasurer claims the planned 3,000 voluntary public sector redundancies will save more than $300 million but not impact frontline services.
Meanwhile, gold producers will see their royalty charges shoot up in an attempt to raise nearly $400 million over four years.
The Government is also shifting hundreds of millions of dollars in regular expenditure into the Royalties for Regions (RFR) fund, blocking plans to fund additional regional projects and re-tolling it to only pay for ongoing costs related to health, water, sewerage and the Government's own election commitments (apart from the ‘no new taxes’ pledge).