2012-13 Government Mid-year Financial Projections Statement

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2012-13 Government Mid-year Financial Projections Statement‘Other revenue’ has been revised up by $29 million mainly reflecting movements inminor revenue items such contributions from external parties and revenue recovery inthe health sector (previously classified as sales of goods and services).2013-14 to 2015-16General government revenue has been revised down by a net $1.0 billion across theoutyears. This mainly reflects the impact of:lower royalty income (down $1,847 million), due to lower than expected commodityprices (with the exception of gold) and a higher than expected $US/$A exchange rate(see above);higher taxation revenue (up $1,107 million), with upward revisions to payroll tax($517 million), insurance duty ($170 million), duty on transfers ($126 million), motorvehicle licence duty ($106 million), and land tax ($101 million);higher GST revenue grants (up a net $1,280 million over the period 2013-14 to2015-16). This is mainly due to the increase in the State’s share of the nationalpopulation following the 2011 Census (noted above) and the lagged impact on theState’s GST share from the revised mining royalty outlook. Western Australia’s GSTrelativity is now expected to decline from 55% in 2012-13 to 35% in 2015-16;a downward revision to North West Shelf royalty grants and crude oil excisecompensation grants (of $706 million), reflecting a higher exchange rate, lower oilprices, and lower LNG prices;revisions to Commonwealth tied grants (down $266 million), mainly due to thereclassification of revenue received by WA Health to sales of goods and services($208 million), revisions to natural disaster funding since the May 2012 budget, andchanges to the timing of other grants;lower estimates for dividends and tax equivalent revenue (down $912 million),largely driven by the net impact of:lower customer revenue as a result of lower demand and a lower return on assets(particularly for Western Power following the Economic Regulation Authority’sdetermination for Western Power’s Access Arrangement); andthe implementation of a port access fee at the Port Hedland Port Authority($168 million across the outyears);higher estimates for agency sales of goods and services (up $438 million), reflectingthe reclassification of Commonwealth grants revenue received by WA Health($208 million, noted above) the Government’s decision to implement revised miningrehabilitation arrangements associated with the remediation of mine sites($137 million), and the outyear impact of growth in the revenue base in 2011-12(noted above); andthe impact of changes to the outlook for interest rates and cash holdings on interestincome (down $197 million), mainly due to the lower interest rate outlook sincebudget.10
Financial Projections2018161412108642PercentGENERAL GOVERNMENT REVENUE GROWTHRevenue growth (LHS)Long-run averagegrowth = 8.5%Total revenue (RHS)Forecast$ BillionFigure 13530252015105002001-02 2003-04 2005-06 2007-08 2009-10 2011-12 2013-14 2015-16Expenses2012-13General government expenses are forecast to be $25.2 billion in 2012-13, $103 million(or 0.4%) lower than budget.Expense growth for 2012-13 has reduced to an estimated 2.5%, down from thebudget-time forecast of 4.2% and well below the long-run average of 8.4%. This declineis largely attributable to the range of savings measures implemented since the2012-13 Budget (which will generate expense savings of around $364 million in thecurrent year) and the ‘base’ impact of higher than expected recurrent spending in 2011-12(detailed in the 2011-12 Annual Report on State Finances).11
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2012-13 Government Mid-year Financial Projections Statement

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