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Business-as-usual State budget delivers tax cuts, little new spending

Eric Ripper has just delivered his State Budget speech, and aside from moderate-sized tax cuts and a bunch of small new funding measures, it's mostly business as usual.

The key points are:

• WA's GSP growth this financial year is 6%, with forecasts of 4.5% next year and 5% the year after
• The cash surplus is $1.8 billion this financial year, and is expected to be $1.4 billion next year
• The biggest new item is the tax cuts that various groups have been calling for. $2.1 billion over the next four years will be lost by cutting stamp duty and property tax
• The stamp duty exemption for first homebuyers will apply for homes up to $500000 (rather than $250k as it is now) and a partial exemption will be available for homes up to $600k
• Land tax will be reduced, with the tax-free threshold lifted to $250000 (from $100k), and the Metropolitan Region Improvement Tax will get a tax-free threshold of the same value
• Motor vehicle stamp duty thresholds will be raised by $5000 from 1 July, and by another $5000 in January 2009
• The new Fiona Stanley Hospital in Murdoch will be paid for out of this year's surplus (rather than debt), and is expected to cost $1.1 billion
• $104 million over four years will be spent on the new Department for Child Protection

Most of the other Budget measures have already been known for some time:

• increases in water rates and public transport fares
• $897 million next financial year to upgrade the electricity transmission network
• $706 million on roads such as the Bunbury highway and Mitchell Freeway extension
• $376 million for new Homeswest housing
• $324 million for health infrastructure and hospital upgrades, particularly at Rockingham, Joondalup, and Broome
• $55.3 million to recruit 260 additional police officers
• $48 million to improve vehicle licensing services
• $44.5 million to upgrade facilities at TAFE colleges
• $20 million for the climate change policies announced last weekend

But these figures are all dwarfed by the annual amounts for recurrent spending: $5.8 billion for capital works (in total), about $4 billion for health, and $3.3 billion for education. So this Budget doesn't involve any huge changes in spending patterns.