The Revised Estimates Report released today shows that the budget is on track to return to surplus next year and remain in surplus over the forward estimate period, three years ahead of schedule.
The report projects an improved bottom line this year with the operating deficit expected to be $56.6 million ($1.9m better than budgeted), which would make it the best budget result in five years.
This good result is a reflection of the strong spending discipline we have shown since coming to government, with growth in expenditures constrained to just 1.7 per cent over the budget and forward estimates, compared to 4.8 per cent under the last eight years of Labor and the Greens.
Borrowings are forecast to reduce by nearly $70 million; net debt has improved with net cash and investments now projected to reach $409.5 million for 2015-16, up from around $253 million in the Budget.
It is important to highlight that without our budget savings measures from last year, the budget would have remained in deficit right across the forward estimates.
Healthy surpluses remain across the forward estimates; however, the need for ongoing budget discipline remains as the risks identified in the Budget are still present as well as fire, floods and other recent challenges.
Additional expenditure committed since the Budget reflects our focus on the core services of government, with $25.6 million for the Family Violence Action Plan, $13.5 million for our Affordable Housing Strategy, and $10 million in additional funding for our hospitals.
Reflecting our strengthening economy, tax receipts are projected to increase by $10.1 million across the Budget and Forward Estimates period, and GST receipts are expected to be around $33 million higher over the same period relative to that in the Budget.
Returns from Government businesses are strong, however, a prudent approach has been taken to forecasting returns the Hydro and total reductions of around $33 million in dividends and $21 million in tax equivalent payments have been factored into the budget across the three-year forward estimates period.
However, given other businesses are performing better than forecast, overall returns from the portfolio are expected to remain broadly at the same level as at Budget.
Infrastructure investment is strengthening and it is expected that an additional $25 million will be invested this year increasing the total investment to nearly $435 million. Infrastructure investment increases across the forward estimates as we deliver on the $1.8 Billion infrastructure package that was included in the Budget.
The report also confirms an improved economic outlook for the state, with economic growth confirmed at 2.5 per cent for this year, the projected unemployment rate revised down from 6.75 per cent to 6.5 per cent and the participation rate rising slightly.
While ongoing discipline is required, bringing the budget back under control, as well as a strengthening economy, means we are well placed to weather unexpected financial challenges whilst being able to invest the dividends in the core services of government, such as health, education, and looking after our most vulnerable.