THE West Australian government's debt projections show the state sliding deeper into the red as huge spending on infrastructure overshadows revenue raising and cost cutting measures.
The 2014/15 state budget handed down on Thursday shows the goal of restoring WA's AAA credit rating is a long way off, with debt creeping up to $27.5 billion by 2016/17, from $26.9 billion in the mid-year economic review.
A whopping $23.7 billion in planned infrastructure projects over the next four years will maintain the need for increased borrowings, Treasurer Mike Nahan told parliament as he delivered his first budget.
With just $243 million in infrastructure spending pushed back beyond 2017/18, Dr Nahan said the government would "keep a close eye" on debt levels.
Opposition leader Mark McGowan said the Liberal government should not have pushed ahead with all of its big projects.
"I went to the state election suggesting some changes that would have saved money," Mr McGowan told reporters.
"[Premier Colin] Barnett just went to the people and said 'you can have all of the capital works and we won't put up electricity prices'. Clearly, that was untrue."
The Barnett government had promised before last year's state election to keep electricity price rises "at or around inflation", but they will instead increase by 4.5 per cent.
Water bills will also rise, motorists will be slugged with a three per cent hike in vehicle registration fees and there will be a four per cent increase in public transport costs.
Dr Nahan says something has got to give, with the state receiving less GST as its royalties rise on the back of greater export volumes, and with massive infrastructure spending unavoidable as WA's population continues to surge, despite a slowdown in business investment.
But Mr McGowan was unforgiving.
"This is a budget of pain, hardship and dishonesty that will impact every West Australian man, woman and child," he said.
"It's a horror budget on the hip pocket. It's a budget that hurts people who can least afford it.
"They've had seven treasurers in the last five years. This is a government not fit to be in government."
Standard & Poor's Ratings Services, which downgraded the state's credit rating from AAA to AA+ in September last year, was also critical.
It said the latest budget had no measures in place to deal with structural problems and left the state vulnerable to "external shocks" such as volatile commodity prices.
Ratings agency Moody's said improved financial performance would rely to a large extent on the state's ability to lower expenditures.
In 2014/15, the state's spending forecast of 2.6 per cent compares to a much higher rate of spending in the current financial year of 9.1 per cent, but this trend largely relies on employee costs rising by only 2.9 per cent.
That won't please public sector unions, which want bigger wage increases.
Despite the mounting debt, the WA government has managed to polish its net operating balance, replacing a $124 million deficit that was flagged for the coming financial year with a $175 million surplus.
But in 2015/16, the surplus is expected to be a measly $5 million.
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