Mining royalties have continued to strengthen Western Australia’s economy, with the government sector recording a $1.1 billion surplus for the first half of the financial year.

 

The operating surplus of $1.1 billion for the first six months of 2010/11 is a significant turnaround from the $259 million operating deficit for the first half of 2009/10.

 

Treasurer Christian Porter said the WA Quarterly Financial Results report showed the state reaped nearly $12.3 billion worth of revenue for the first half of 2010/11.

 

That is up by $2.1 billion on the same period last financial year.

 

"The main driver of this increase was a rise of $964 million in mining royalties, partly due to the state government's successful negotiations to remove the royalty concession on iron ore production," Mr Porter said.

 

Increased taxes added an extra $509 million to revenue as well as the one-off payment of $350 million by BHP Billiton and Rio Tinto resulting from changes to the State Agreement Acts.

 

The increase in mining revenue offset subdued property and retail sectors, which were down $89 million.

 

General government sector expenditure was also up $761 million, blowing out by 7.3 per cent because of higher grants spending and the government's one-off payroll tax rebate.

 

Public sector net debt also rose by $446 million in the first six months of 2010/11, in line with planned spending on major infrastructure.

 

Spending on public infrastructure was up $338 million from the same period in 2009/10 due to construction on the Southern Seawater desalination plant, Fiona Stanley Hospital and other health infrastructure projects..