Not sure where this chap was when the WA budget was drawn up. From The West Australian, Acting Under-Treasurer Michael Barnes:
After visiting several Chinese cities, including Hohhot, the capital of Inner Mongolia, Mr Barnes said he was convinced the sector was due for a severe correction.
…”As far as the eye can see there are rows and rows and rows – not just in this city (Hohhot) but every city I went to – of 20, 30-storey empty apartment buildings,” Mr Barnes said.
“It’s extraordinary. The official estimate in China is there are 50 million surplus apartments, yet they’re still building them.
“So I came away from that thinking this bubble has got to burst at some stage.”
Put him in charge!
Meanwhile, The Australian rightly heaps scorn upon Colin Barnett:
Barnett was a largely successful and popular premier in his first term between September 2008 and March last year, but that was an era of high commodity prices that delivered the government a revenue windfall unprecedented in the state’s history.
The Premier tapped into the boomtime mood by spending big on projects…The most egregious example of Barnett’s profligacy was a failure to rein in the Nationals’ pet scheme, Royalties for Regions, even as it delivered absurd amounts of money to the bush.
To pay for it all, Western Australia’s net debt blew out from $3.6 billion to more than $20bn and the state lost its AAA credit rating — a major blow to Barnett’s credibility from which he may never recover.
The latest Newspoll for Western Australia shows a record low 32 per cent of voters are happy with Barnett’s performance — down from 58 per cent in 2011. Voters are fed up with a premier who has a dictatorial style of leadership — hence his nickname “the Emperor”…
Well they might be pissed. The stupidity of the aggressive iron ore forecasts also going to cost GST revenue. From Yahoo:
WA’s GST share has an inverse relationship with mining royalties, so a downward revision of iron ore price assumptions in December’s mid-year review means there will be a corresponding upward revision of GST revenue.
…But there is a catch. The Commonwealth Grants Commission’s GST distribution system has a three-year lag, which means WA will not see a GST benefit of the present iron ore softness for at least that long.
“It will be higher than 11¢ in three years time . . . There is likely to be an increase in GST, but nowhere near that of the reduction in iron ore revenue,” Dr Nahan said yesterday.
“I can tell you this year and next year, there will likely be no change.”
Iron ore is going materially lower in the next eighteen months yet the Barnett Government will stick with ridiculous price forecasts, meaning the GST revenue will be much lower than it should be and the panic spending cuts all the greater each time royalties miss forecasts.
Comedy is turning to tragedy for the mismanaged Western Australian budget.
