Former Liberal government financial management slammed in damning review

Former premier Colin Barnett’s record of managing the State’s finances was “close to disastrous”, according to a damning inquiry that found the previous government’s profligacy ruined the budget despite record revenues.

Special inquirer John Langoulant today handed down the findings of his six-month investigation of the Barnett government’s financial dealings, saying flawed processes and an almost complete disregard for the forward estimates were behind the parlous state of the finances.

In a withering assessment of how the previous government managed the budget, Mr Langoulant fingered the Royalties for Regions program as the poster-child of what went wrong.

The former under treasurer said the program, which quarantined a quarter of mining royalties for spending in the regions, “destabilised” Mr Barnett’s administration by syphoning money and spending it outside of normal, and proper, budgetary processes.

Mr Langoulant also took aim at the general way the former government made spending decisions, saying projects and initiatives often went to Cabinet for decisions before they had been seen by Treasury and without adequate information to explain how they would affect the state’s bottom line.

According to Mr Langoulant, one of the worst cases included a multibillion-dollar services contract – ultimately awarded to Serco – for Fiona Stanley Hospital that went to Cabinet without a business case.

Of the 31 projects the inquiry scrutinised – which was expanded from the 26 projects originally highlighted in the terms of reference – Mr Langoulant said three quarters were judged as having questionable or poor oversight.