19 May 2011

Economic Assumptions

Economic Growth Gross State Product, Western Australia

Financial Outlook Forecasts (a) Commonwealth Budget papers (b) Total non-financial public sector (c) As defined by Standard & Poor’s

Revenue

Financial Outlook National Pool and GST Grants

Financial Outlook GST Grants 4,642 5,037 5,381 5,717 6,040 3,165 3,233 2,497 1,997 3, ,000 2,000 3,000 4,000 5,000 6,000 7, Equal per capita GST grants Estimated GST grants $ million LOSS = $12.3 Billion

Royalties Redistribution

Financial Outlook Total Duty on Transfers, Western Australia

Financial Responsibility Operating Position and Cash Position

Financial Responsibility Net Debt (a) and Net Financial Liabilities (b) (a) Total public sector (b) Total non-financial public sector

Financial Responsibility Net Interest Cost as a Share of Revenue (a) 33% GST Scenario (a) Total non-financial public sector

Asset Investment Program

Asset Investment Program

Increased Accountability Disciplined Financial Management 4.6% increase in charges for a representative household –Electricity tariffs (5%) Current subsidy costs $1.1 billion Freezing tariffs would increase the subsidy to $3 billion –Water charges (8.5%) –No change in: driver’s license fees compulsory third party insurance premiums motor vehicle recording fees Transperth 50 cent student fees or stamp duty on insurance premiums

Increased Accountability Disciplined Financial Management $3.5 billion package of new measures –Phased alignment of the iron ore ‘fines’ royalty rate (currently 5.625%) to the 7.5% iron ore ‘lump’ rate ($1.9 billion) –5% efficiency dividend on GTEs ($515 million) –Targeted review of low priority programs ($300 million) –Deferred infrastructure spending ($541 million) These measures build on previous efficiency dividend savings ($1.46 billion over four years out of a target of $1.6 billion) Additional savings from procurement and State Fleet ($280 million over four years)

Increased Accountability Disciplined Financial Management Expenses up $1.8 billion (or 7.9%) in Expense growth moderating – down from average of 10.9% over previous three years Government has restricted growth in number of full-time equivalent public servants to 1.7% in Funding a further 400 voluntary separations – bringing total number of separations to over 1,200, for savings of $57 million per year

19 May 2011