Western Australia Budget analysis 2021-22
9 September 2021
The 2021-22 Western Australia Budget has a focus on health, social housing and climate as the state looks towards a sustainable future. A projected 2021-22 surplus of $2.8 billion shows that WA is in a relatively healthy financial position compared to many jurisdictions at this time.
The 2021-22 WA Budget presents a robust financial picture, with a predicted net operating surplus of $2.8 billion for the current financial year and the state’s economy projected to grow by 3.5 percent during this time. Further surpluses are projected over the remainder of the forward estimates period to 2025. State government net debt is projected to level off at around 11.5 percent of gross state product from 2022 to 2025.
Interestingly, the forward estimates for the period 2022 to 2025 include an estimate of the iron ore price at USD 66 per tonne (closer to its long-run average), compared to the estimate of USD 121 for 2021-22.
Against this backdrop, the WA government has chosen not to make any significant changes to the state’s tax regime.
As many would expect on the expenditure side, the state’s healthcare system receives significant additional funding of $1.9 billion towards additional beds, COVID-19 measures and mental health initiatives.
We welcome the additional commitment of $875 million to social housing programs, taking the budgeted spend over the forward estimates to more than $2.1 billion. This is expected to produce around 3,300 new homes and is an important element in restricting the number of people at risk of being left behind as Australia adjusts to the more highly vaccinated phase of the pandemic.
For a full copy of KPMG’s executive summary and analysis of the Western Australia 2021-22 Budget announcement, download our report.
New South Wales Budget analysis 2021-22
22 June 2021
The NSW Government has reinforced that as the state emerges from the pandemic, building a stronger economy will require reform to lift productivity growth. The Budget’s focus is about accelerating the recovery and transforming the state. This was strongly supported by the 2021-22 NSW Intergenerational Report and NSW Productivity Commissioner’s White Paper 2021.
The Budget has revealed a projected operating balance deficit of $7.9 billion for 2020-21, which is $8 billion smaller than it forecast only last November. The forecast deficit for 2021-22 is $8.6 billion, with an expectation that the operating balance will return to surplus in 2024-25.
This improvement in state finances has provided the government with additional scope to invest in physical infrastructure. The government’s capital spending program for the period of the forward estimates now stands at $108 billion, of which transport stands to be by far the largest beneficiary ($71 billon).
The public health consequences of the pandemic are likely to remain with us for some time and we welcome the government’s proposed total capital expenditure in health care infrastructure of more than $10 billion over the forward estimates.
In its submission to NSW Treasury’s Review of Federal Financial Relations in early 2020, KPMG supported both Electric Vehicle (EV) reforms and the property tax reform which will phase out inefficient stamp duty and land tax. The 'Progress Paper', launched on 10 June 2021, reflected stakeholders’ and the community’s detailed feedback, which provided strong support for the proposed changes.
For a full copy of KPMG’s executive summary and analysis of the New South Wales 2021-22 Budget announcement, download our report.
Queensland Budget analysis 2021-22
15 June 2021
The principal feature of the 2021-22 Queensland Budget is the government’s continued economic support for employment growth.
The Budget projects an operating deficit of $3.8 billion for 2020-21 (more than $4.8 billion lower than forecast in the previous Budget) and a deficit of $3.5 billion for 2021-22. This represents a considerable improvement in the government’s financial position in the space of six months. There is even a projection of a small surplus for 2024-25.
The Budget includes the announcement of the expansion of the Queensland Jobs Fund to a total capacity of more than $3.3 billion. This is intended to support business in creating new roles in Queensland. $2 billion of this support (which is a $1.5 billion increase on the previous $500 million commitment) will go to the Queensland Renewable Energy and Hydrogen Jobs Fund. This includes the natural resources sector’s role in extracting the raw materials necessary for constructing the renewable energy generation and transmission infrastructure.
The government is committing an aggregate $460 million over four years to the Skilling Queenslanders for Work and Back to Work programs. The Back to Work program provides eligible small businesses with a financial incentive to hire previously unemployed workers.
For a full copy of KPMG’s executive summary and analysis of the Queensland 2021-22 Budget announcement, download our report.
Victorian Budget analysis 2021-22
20 May 2021
The 2021-22 Victorian Budget sees further investment from the government, with some additional revenue-raising measures.
The Victorian Government’s budget for 2021-22 projects a net operating deficit of $17.4 billion for 2020-21 and a further deficit of $11.6 billion for 2021-22. Government net debt is not expected to exceed 27 percent of gross state product at any stage over the period from 2021 to 2025.
Alongside a $7.1 billion commitment to improving healthcare infrastructure and services, a prominent feature of the Budget’s expenditure program is the announcement of $3.8 billion allocated to the transformation of mental health and wellbeing support in Victoria. More than 20 percent of this is targeted at supporting children, young people and families.
The government notes that the Royal Commission into Victoria’s mental health system estimated the annual economic cost to Victoria of poor mental health at $14.2 billion. The Budget includes a proposed levy on employers with a national payroll greater than $10 million. The levy would be 'ring-fenced' to funding mental health support services in Victoria and would apply from 1 January 2022.
The Budget’s investment of $3.2 billion in transport infrastructure includes new trains and support for the increased take-up of 'zero emission' vehicles.
For a full copy of KPMG’s executive summary and analysis of the Victorian 2021-22 Budget announcement, download our report.