REINING in ballooning government spending, maintaining strong financial discipline and cutting state taxes should be the key priorities of the state government’s 2010 budget, Western Australia’s peak business body believes.
REINING in ballooning government spending, maintaining strong financial discipline and cutting state taxes should be the key priorities of the state government’s 2010 budget, Western Australia’s peak business body believes.
In its 2010 pre-budget submission this week, the Chamber of Commerce and Industry WA said with economic conditions improving, the government must now start “reining in unsustainable spending growth” if the state is to capitalise on the economic opportunities now emerging.
“A critical issue for securing the state’s economic future and delivering on the boom is to protect the state’s finances,” the chamber said in its submission.
“WA’s budget position remains weak, and on current estimates will deteriorate further. This is again the result of high levels of government expenditure – a trend that must change if the budget position is to improve.
“CCI believes that a key priority for the 2010-11 budget must be to contain growth in general government expenses and protect the state’s finances. A failure to do so will increase the pressure on the government to find additional sources of revenue through higher taxes and charges, and limit the capacity of the state government to invest in much needed infrastructure across the state.”
The chamber said curbing growth in government spending could only be achieved through structural reform of the public sector, greater private sector involvement in service delivery, and improving the direction and accountability of government agencies.
Describing WA as the highest taxed state in the country, the chamber said it was also vital to deliver significant tax reform, starting by cutting payroll tax, increasing the exemption threshold and addressing the recent “surge” in land tax assessments.
Providing high-quality social and economic infrastructure was another key priority, but one that needed to be pursued in a “fiscally responsible manner” so that the state could maintain its AAA credit rating.
It was therefore vital for the state government to implement a detailed infrastructure strategy to provide “a greater degree of certainty as to the likely future infrastructure projects that will be undertaken in the state, including regional infrastructure plans”.
CCIWA identified a number of key infrastructure projects it believed should take the highest priority, including road upgrades around Perth Airport, port infrastructure at Oakajee, Derby, Cockburn Sound and Bunbury, power and water utilities, social infrastructure such as a multi-purpose sports stadium and urban renewal, regional rail upgrades and state-wide broadband services