Regional Western Australia lands $45m for mobile coverage

Over the next four years, the Western Australian government is slated to enter phase two of its Regional Mobile Communication Project, as AU$45m was allocated in the state's budget yesterday.

The budget papers state the first stage of the project cost AU$40m, involved 113 new or upgraded communication towers, and took telecommunications into 15 communities, with the second stage of the project concentrating on broadband accessibility in remote and regional communities.

"The adoption of broadband-enabled services is fundamental to improving the productivity, competitive standing and wellbeing of regional WA," Treasurer Mike Nahan said.

Broadband availability is not only an issue for Western Australia in regional and remote areas, with the South West Development Commission listing broadband as a significant issue in the budget papers.

"Growth in digital and technology-based industry especially along the coastal strip is fuelling demand for high upload capacity on broadband infrastructure," the budget papers said.

Overall, the state budget projected that the state would slide deeper into the red as huge spending on infrastructure overshadows revenue raising and cost cutting measures.

The 2014/15 state budget shows the goal of restoring WA's AAA credit rating is a long way off, with debt creeping up to AU$27.5 billion by 2016/17, from AU$26.9 billion in the mid-year economic review.

A whopping AU$23.7 billion in planned infrastructure projects over the next four years will maintain the need for increased borrowings, Nahan told parliament as he delivered his first budget.

With just AU$243 million in infrastructure spending pushed back beyond 2017/18, 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," 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 percent.

Water bills will also rise, motorists will be slugged with a three percent hike in vehicle registration fees and there will be a four percent increase in public transport costs.

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 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 percent compares to a much higher rate of spending in the current financial year of 9.1 percent, but this trend largely relies on employee costs rising by only 2.9 percent.

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 AU$124 million deficit that was flagged for the coming financial year with a AU$175 million surplus.

But in 2015/16, the surplus is expected to be a measly AU$5 million.