2012-13 Government Mid-year Financial Projections Statement

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2012-13 Government Mid-year Financial Projections StatementStructural DeficitsThe Departments of Planning and Transport are projecting structural deficits in theirrespective budgets. In 2011-12, supplementary funding was provided to meet theseshortfalls. Supplementary funding may again be sought to cover recurring shortfalls in2012-13 should the agencies be unable to address the situation. A Value for Moneyreview is currently in progress and it is expected that recommendations arising from thisreview will identify options to address deficit outcomes in these agencies.The Department of Fisheries has also highlighted potential structural issues due to costand demand pressures, and reductions in forecast revenue levied on commercial fishing.Supplementary funding may be sought to meet these issues in the short term, as well asconsideration of prioritising services that the Department currently provides.The Office of the Director of Public Prosecutions has indicated the likelihood of realisingoperating deficits across the forward estimates due to cost and demand pressures.The agency has been requested to review all services and functions to identifyefficiencies. However, supplementary funding may be sought in 2012-13.Wages GrowthSalaries costs represent around 40% of general government sector recurrent spending.The forward estimates are consistent with projected growth in staffing levels andGovernment wages policy (which seeks to limit wage growth to be in the range offorecast growth in the Consumer Price Index and the Wage Price Index). Should futuresalaries growth exceed these assumptions, the projected financial outcomes included inthis mid-year review will be at risk.Contingent LiabilitiesContingent liabilities are costs that the Government will have to meet should a particularevent occur. Typically, contingent liabilities consist of guarantees, indemnities andsureties, as well as legal and contractual claims. They constitute a potential risk to thefinancial projections.Native Title ClaimsPerth and South WestIn February 2012, the Government announced a significant cash and land offer to be madeto Native Title claimants in Perth and the South West for descendents of the Noongarpeople. If accepted, the deal is to provide security of ownership for the region.Negotiations still need to be progressed to finalise the offer, which may include asignificant cash component over a ten year period, as well as transfer of large tracts ofCrown land to the Noongar people.42
Financial ProjectionsAs a final offer had not been made at the cut-off date for this mid-year review(10 December 2012), and as uncertainty remains with respect to the amount and timing ofthe expected cash component of the offer, these mid-year review projections make noprovision for this matter.Anketell PortThe State is entering into consultation and negotiation with Native Title holders inrelation to the site for the Anketell Port and Strategic Industrial Area. It is expected thatthe cost of any Native Title settlement will ultimately be paid by, or recouped from, thesuccessful port participants.Other Contingent Assets and LiabilitiesDetails of the quantified contingent assets and liabilities of the State at 30 June 2012 areprovided in the 2011-12 Annual Report on State Finances. At that time quantifiedcontingent assets totalled $19 million and contingent liabilities totalled $2.0 billion.No material change to that disclosure has been noted to date.43
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2012-13 Government Mid-year Financial Projections Statement

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