Western Australia will be in deficit by 2011, according to Treasury figures that show a tripling of the state’s debt to $16.7 billion in the next three years, signalling an end to the much feted boom period. The extent of the decline will put the state’s AAA credit rating at risk, admits WA Treasurer Troy Buswell.
“It is not an imminent financial crisis, but it is a very serious matter that we have to work hard and aggressively to address,” he said.
The state will lose approximately $4.4 billion due to falling commodity prices, although the decline in the Australian dollar may offset some of that amount. However, government spending is projected to increase by eight percent this financial year, well above inflation.
Premier Colin Barnett called it “the most difficult financial year this state has faced since probably the early 1990s” but assured that the government would take action to minimise negative effects.
