Bureaucratic crackdown as budget surplus threatened

28 May, 2009 09:26 AM

Treasurer Troy Buswell has ordered all public service office renovations costing more than $100,000 to get ministerial approval, as falling iron ore prices threaten the State Government's projected budget surplus.

Mr Buswell said yesterday that the state's revenue could fall by $135 million next year after Rio Tinto recently negotiated a sharply-reduced iron ore contract with Japanese customers.

Next year's projected budget surplus is $409 million, which is predicated on a 30 per cent fall in iron ore prices. However, Rio's deal with the Japanese is based on prices between 33 and 44 per cent less than last year, and is likely to be in the same range for the company's Chinese customers.

Opposition treasury spokesman Ben Wyatt said the budget assumptions were now unravelling after being "framed on questionable parameters and assumptions".

He also criticised revelations to the committee that a public sector hiring freeze would end at the end of next month.

"After his bluster about capping the growth of the public sector at 99,155 employees, (Mr Buswell) has today acknowledged that his tough talk amounts to nothing," Mr Wyatt said.

Meanwhile, Mr Buswell said government departments would "need to convince their minister" that spending more than $100,000 on office renovations was essential.

The call came after he released figures showing $17.57 million had been spent on renovations since the Liberal-led Government was elected in September. Almost $38 million was spent between January 2007 and December last year.

"Self-indulgent fitouts" such as that of former Labor education minister Mark McGowan's office, which costed $500,000, could no longer be afforded.

"I won't be so generous," Mr Buswell said.

"I am concerned that... government departments have continued to spend significant sums on office fitouts."

Mr McGowan said Mr Buswell only released the renovation spending figure after months of delays due to the obvious embarrassment the blowout had caused.

The spending included $11 million in the first five months of this year.


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