Another multi-billion dollar surplus coming should allow a stingy Treasurer to be more generous

5th May 2023

The Shadow Treasurer Dr Steve Thomas says that the Premier is looking at another multi-billion  dollar surplus this year as a resilient iron ore price pours more money into his money bin. 

“The last budget predicted a budget surplus for 2022-23 of $1.6 billion, but that was based on an  average iron ore price of US$77.50 a tonne” Dr Thomas said. 

“The Premier had to raise that iron ore average in the mid-year review released in December to  US$87.40 and lifted the projected surplus to $1.8 billion. 

“By February this year the latest financial report identified that the budget surplus for the first six  months of this financial year – July to December 2022 - had already produced a net operating  surplus of $2.5 billion. 

“That number has continued to be driven up by the resilient iron ore price that has averaged US$109 so far this financial year. 

“By my calculation even if the price stays at current US$100 for the next two months the average for  the year will be around US$20 a tonne higher than the mid-year review figure. 

“At an extra $90 million coming into Mark’s money bin for each US dollar increase in the average,  the Premier’s surplus will be $1.8 billion higher than the mid-year prediction. 

“In other words, the budget surplus will double! 

“And that is before we consider the additional $1.4 billion hidden by the Premier in retained  earnings of trading entities like WaterCorp because he is embarrassed by his riches. 

“The 2022-23 surplus in the budget will be around $4 billion unless the Premier can massively  increase expenditure to spend his wealth, but the real secret McGowan surplus including the  forgone dividends is over $5 billion, and represents another mountain of cash that should be  providing the best of services and support to the Western Australian people.” 

Dr Thomas said that even though the state was in the later stages of the biggest boom in our fiscal  history, and he expected this to correct back to a more normal fiscal pattern next year, the current  mountain of wealth that has fallen on Mark McGowan should have allowed him to provide better  services to the WA community and to be more generous with struggling Western Australian families. 

“The Premier has limited his support to electricity credits despite our suggestions of other options,  with another $500 credit looking like being on the cards this year” Dr Thomas said. 

Ends.

Media contact: Dr Steve Thomas 0427 908 717