Pain, no gain: Budget to hit families hard

BUDGET LOOMS: WA Treasurer Mike Nahan and Premier Colin Barnett. Source: News Limited

COLIN Barnett will announce his sixth consecutive WA Budget surplus tomorrow – but at a huge cost as he jacks up fees and charges to help pay off mounting state debt.

Government sources said new Treasurer Mike Nahan would announce small surpluses for 2013-14 and the new financial year, but was expected to deliver a tough Budget for WA families.

Sources say:

● Mr Barnett would break a key election promise by increasing electricity charges by 5 per cent, instead of the inflation rate of 2.5 per cent

● Water charges would also go up 5 per cent, as would the fire and emergency services levy and student fares would go up between 15 and 20 per cent

● The Barnett Government is expected to go against the wishes of the real estate industry by tampering with the first home buyers $500,000 transfer duty free threshold. Land tax could also go up

● In an effort to pay back state debt, which is tipped to bust the $20 billion mark for the first time in WA's history, Mr Barnett is preparing to sell off about $1.5 billion worth of state assets in 2014-15, with the Kwinana Bulk Terminal, Utah Point bulk export facility at Port Hedland and possibly the TAB set to go.

It is not known how much of the government's privatisation plan will be announced tomorrow.

● STAMP DUTY SET TO LOWER

● COMMENT: TIME FOR TOUGH LOVE

Mr Barnett today confirmed the stamp duty concession for first home buyers would change in tomorrow's Budget.

Mr Barnett told a media outlet during a question and answer session that the stamp duty concession would continue, "although we are examining the level at which it is pitched".

The Opposition also expects electricity price rises will be aggressive.

During the election campaign last year, Mr Barnett promised to keep power price rises "at or around inflation", but newly installed Treasurer Mike Nahan recently said that would be a "struggle".

The premier described the Budget as "reasonably tough ... to suit the times we're in".

"The next couple of years are going to be a little bit tougher for everyone," he said.

"But we have kept any increases in taxes and charges to a minimum."

Real Estate Industry of WA boss Neville Pozzi told PerthNow young West Australians were already struggling to enter a market where the median house price had climbed to $550,000.

He said the current regulations, which meant first home buyers paid no stamp duty on homes up to $500,000, had helped stimulate what had been a struggling market.

He said lowering the stamp duty free threshold would force many young people into the outer suburbs, which were traditionally cheaper.

"All this will do is reduce the availability of properties that first home buyers can purchase," he said.

"If the number of first home buyers falls, then it also affects trade up buyers in the market which would then have a significant knock on effect to transfer duty.

"This could yet come back to bite the government."

State opposition leader Mark McGowan said the big increases in fees and charges were "an assault on ordinary families and a monumental broken promise."

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