Prisoner growth a risk to WA savings goals

Ratings agency Moody's has pointed to the recent spike in Western Australia's prison population as a key risk to the state government's spending forecasts.

A ratings agency warns rising prisoner numbers and the high cost of remote jails in Western Australia makes it likely the state government will have to sink more cash into corrections, blowing out spending targets.

Department of Corrective Services figures show adult prisoner numbers jumped by 10.9 per cent in the 2016/17 financial year, while the cost of service appropriation rose by $108 million compared to the previous period.

The additional cash was largely spent on managing a larger inmate population, lease and operating expenditure for the new Eastern Goldfields Prison near Kalgoorlie and contracts for the Melaleuca remand and reintegration facility for women in Perth's south.

Moody's said in a credit opinion released on Friday it was critical the state government controlled spending growth to meet its financial objectives.

"The significantly higher cost of operating geographically remote correctional facilities combined with prison projections indicate existing facilities are operating close to capacity constraints," the ratings agency said.

"This situation raises the likelihood of new capital expenditure requirements in the budget forecast period."

The state government noted Moody's observations about corrections spending and took a swipe at the opposition.

"Budget black holes left by the previous Liberal National government, including not addressing the growing prison population in particular, is a risk to this government's efforts," Treasurer Ben Wyatt said in a statement.

Moody's kept WA's rating at Aa2, saying the outlook was stable, reflecting the state's ability to adjust revenues and expenditures to meet its budgetary objectives, a high but manageable debt burden and the stabilising impact of an expected higher GST share.

Ratings agency S&P affirmed WA's AA+ credit rating on Tuesday and is also counting on a bigger slice of the GST but says the outlook remains negative, reflecting continued risks to the state achieving its cost savings and revenue targets.


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Source: AAP


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Prisoner growth a risk to WA savings goals | SBS News