THE sound of silence surrounding the Western Australian Government’s budget, due to be released on May 8, may signal that any bad news for business may be limited.
For the past few years the main points of budgets, both State and Federal, have been made public well before the papers are actually introduced into parliament. It is often the bad news that gets the airing first.
For example, the ill-fated Premium Property Tax was leaked before the Gallop Government handed down its first budget in 2001.
News that State tax hikes were coming in 2002 was announced well ahead of the budget.
This year, however, there has been little said about the State budget other than a mention of more than $30 million for train security, a 5.6 per cent hike in the police budget taking it to $551.6 million and $8 million for national parks.
Leading figures in the business community say that both the Labor Party and Treasury have been keeping unusually quiet about the contents of this year’s papers.
A spokesman for Treasurer Eric Ripper would only say that this year’s budget was being handed down on May 8 and that people would have to wait and see.
The spokesman refused to rule out any tax rises but also refused to rule any in.
Treasury figures for February show the Government has received more than it expected from stamp duty on motor vehicle registrations, property sales and petroleum royalties – up $82.5 mil-lion – due to the skyrocketing oil price at the beginning of the year.
However, the Treasury paper also points out that other royalties, such as those from gold, alumina and nickel, are down.
Revenue from water charges is also down, primarily because of the summer’s water restrictions.
The Government also faces a $40 million hole in its finances from the last budget due to the money it lost on a stamp duty bill it brought against the Westralia Airports Corporation. The WA Supreme Court cancelled out that tax bill.
There have been rumours that, instead of tax increases, business and consumers could face increases to charges such as water, power and, in the CBD, parking. The parking levy introduced in 2000 started off at around $70 per bay per year in the CBD, a figure later increased to $150 per bay per year.
Property Council of Australia WA executive director Joe Lenzo said he had “a feeling” that the Government was looking for more revenue.
“I think there will be some minor increases in charges and possibly to some taxes,” he said.
Mr Lenzo said the Property Council had been putting the property sector’s case to the Government that it was the highest taxed business class in WA and hoped the Government would take that on board.
Chamber of Minerals and Energy chief executive Tim Shanahan said the mining sector had been the reason for the State’s strong financial performance and was hopeful of some help out of the budget, particularly for the exploration side of the industry.
“We’ll also be looking to see that there is not an unreasonable impost on business, and mining in particular,” he said.
Chamber of Commerce and Industry chief economist Nicky Cusworth said the Government could not rely on some of the financial windfalls it had received this year, such as the stamp duty due to the housing boom and petroleum royalties.
“The bottom line for this financial year will be better than expected but it will be tougher in the next financial year,” she said.
“I think business will be very disappointed if there are more tax hikes. However, having said that, the fiscal year ahead looks tight.”
However, Housing Industry Association executive director John Dastlik said the housing sector, both in terms of building and sales, could be relied on to provide good revenue to the Government through to the end of this financial year.
“We are expecting a soft landing for the housing boom somewhere towards the end of the 2003-04 financial year,” he said.
While separate from the budget, the Government’s proposed removal of nuisance taxes will have some benefit for business.
The first tranche of the new taxes, spawned by the Government’s business tax review, is yet to pass through parliament but the changes are expected to be in place by July 1.
Mr Ripper’s spokesman said the changed taxes would favour business by about $70 million.
The changes, due to come in before July 1, include replacing the payroll tax scale with a single marginal rate of 6 per cent over an exemption threshold of $750,000, abolishing lease, cheque and marketable securities duties, and considerable changes to conveyance duty.
