Royalties for Regions policy

Royalties for Regions is a political policy formulated by the National Party of Western Australia in 2008 which involves the redirection of Western Australian state government spending from the major population centres, particularly Perth, into the rural areas of the state. This spending would be funded by setting aside 25% of the state's mining and petroleum royalty revenue.

Following the 2008 state election, the National Party used its balance of power in the WA parliament to form government with the Liberals led by Colin Barnett, by trading Nationals support in exchange for spending guarantees under the policy.

In 2006-07, the state received royalties totalling $2.1 billion (2007-08 forecast:$2.5 billion, 2008-09:$2.7 billion). This data suggests that $675 million of annual funding could be assigned under the policy.

According to the Western Australian Department of Regional Development, Royalties for Regions delivered $3.67 billion to regional areas between December 2008 and June 2014. In 2013-14 $1.06 billion was invested.

On 10 September 2008, WA's Department of Treasury and Finance issued a public statement saying that the policy could threaten the state's AAA sovereign credit rating. which would cause an increase in the cost of short-term funding. Under Treasurer Tim Marney said that the plan would cost $2.8 billion in additional expenditure over the next four years, and in the absence of offsetting changes, take the net debt to revenue ratio to around 53% by 2011-12. 47% is the financial target adopted by Treasury to maintain the rating. The state budget is currently in surplus with $203 million the forecast surplus for 2011-12.

Nationals leader Brendon Grylls stated that the ratio blowout could be avoided by reassessing major capital projects in Perth, such as the proposed $500 million museum redevelopment and the suburban rail extension to Ellenbrook which was expected to cost $850 million.

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