The Shadow Treasurer Dr Steve Thomas says that today’s CommSec State of the States Report is generally good news for the Government, but again highlights the reliance of the WA economy on the current mining boom.
“The Premier has been talking down our economy and talking up the risks of recession in order to support his need to hold back much of the massive surpluses he received in recent years to fund his pet projects, but he can take comfort from this report when it highlights our economic growth” Dr Thomas said.
“This report should be most reassuring for a Premier who has been at pains to highlight the downside risks despite most economists predicting the softest of landings here in Western Australia.”
Page 4 of the report says that
“Western Australia continues to lead on relative economic growth. Economic activity in Western Australia in the year to September 2022 was 36.6 per cent above its ‘normal’ or decade-average level of output”.
“This may hopefully convince the Premier that he doesn’t need to hoard his royalty produced wealth in his money bin or his new Special Purpose Accounts” Dr Thomas said. “Instead, he could use that wealth for the benefit of the people of Western Australia.”
The report again highlighted the state’s reliance on the mining sector, which provides both risk and opportunity, but did not provide the same rosy picture for the rest of the economy.
“In the mining sector Western Australia has both opportunity, represented by growth in demand for rare earth and clean energy minerals, and risk represented by the inevitable correction in the iron ore price” Dr Thomas said.
The report highlighted that Western Australia had the lowest growth in nominal economic activity when the mining sector was removed from the calculation. It said –
“If seasonally adjusted State Final Demand in real terms is used, comparing the latest result with decade averages reveals some subtle changes in the rankings. Western Australia, Queensland and the Northern Territory lose the benefit of their strong resource exports.”
“The weakest on annual nominal economic activity is Western Australia (up 4.1 per cent), behind Tasmania (up 6.1 per cent) and the ACT (up 7.6 per cent).”
“Construction work done in the September quarter was down 35% on the ten-year average despite us still being in the mining boom” Dr Thomas said. “This again highlights the need to use the iron ore boom to grow the other industries in this state.”