Sydney / Bloomberg
Prime Minister Malcolm Turnbull’s government promised to invest A$490 million ($370 million) in infrastructure in West Australia in the coming financial year, seeking to redress the state’s shortfall in the share it receives of the federally collected goods and services tax.
The allocation follows a similar investment last year, as the state continues to receive the lowest revenue from the tax, relative to population, according to an e-mailed statement on Sunday from the government.
West Australia’s role as the main exporter of iron ore has hurt its share of revenue from the sales tax, as the surge that took raw materials prices to historic highs continues to have an impact on the state’s share of revenue even after the steelmaking material dropped in recent years, according to the statement.
Moody’s Investors Service downgraded West Australia in February by one level to Aa2, the third-highest grade, citing deterioration in the state’s finances and concern that the drop in iron-ore prices would lead to wider budget deficits. Iron ore delivered to Qingdao tumbled more than 50 percent over the past year and reached $38.30 per metric ton on Dec. 11, the lowest since at least 2008, according to prices from the Metal Bulletin Ltd. It peaked at $191.70 in February 2011.
Turnbull said his government would hand down a prudent budget next month, speaking less than a week after a major opinion poll showed
the government trailing the opposition for the first time since he deposed Tony Abbott seven months ago.
“This budget will not be about a fistful of dollars, it will be about prudence, fairness and responsibility to our future generations,” Turnbull said in a speech to the Victorian Liberal Party conference in Melbourne on Saturday. It will “include changes to our tax system designed to generate jobs and growth; promote investment, innovation and enterprise.”
The latest Newspoll survey published in The Australian newspaper on April 5 showed the Liberal-National coalition falling behind the Labor Party on a two-party preferred basis, 49 percent to 51 percent. Turnbull’s
personal approval rating also slipped to a new low of 38 percent, down from a high of 60
percent last November.