West Australian Treasurer Troy Buswell says the Liberal-National government's $700 million regional royalties fund will take a 4 per cent "haircut" in the state budget on Thursday, confirming the global economic turmoil has forced the National Party to back down from its formerly non-negotiable policy.
According to The Australian Financial Review, the royalties for regions deal was meant to quarantine 25 per cent of the state's total resources royalties - or an estimated $2.8 billion over four years - to spend on regional infrastructure and services.
But Mr Buswell told the AFR the Nationals had agreed the regional fund policy would need to be cut back in line with government savings measures.
The cuts mean about $110 million over four years is likely to be shaved from the money originally committed, on top of the 3 per cent efficiency dividend that will force all agencies to find extra savings in their budgets.
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