Budget must offer real plan
This article was first published by The West Australian, p. 58, 08/10/2020
Today’s state budget is expected to see strong revenue results primarily due to the resurgence in iron ore prices driving multiple billions of dollars into the State’s finances.
The test for the WA Treasurer will be knowing how to spend it in a responsible manner that brings long-term economic and social benefits to all West Australians.
The Budget must provide a genuine plan for Western Australia’s economic recovery from COVID-19, or it will be a lost opportunity.
Most importantly, it must include a specific jobs target. It is fortuitous that we are experiencing a second mining boom to help us through this pandemic, but this Budget will also reveal just how much help — or lack of it — the McGowan Government has given struggling WA households and small businesses.
Despite WA Labor claiming it has committed $5.5 billion in COVID support measures, the recent WA financial report proved very little support has flowed on to households and business with many of the announcements nothing more than smoke and mirrors.
This has left the Federal Government to do all the heavy lifting on the recovery plan, while the State Government reported a $1.7b surplus to June 30.
This was massively understated — by at least $1b — to hide how much money the State actually has.
If the Government is serious about supporting West Australian businesses and the economy, then this $5.5b cannot be allocated to existing projects — it must be additional funding to support post COVID economic growth. Anything less is just spin from the McGowan Government.
And while we’re lucky to have a burgeoning and reliable resources industry that has quite literally carried the State and Australia during a global economic crisis, we’re
becoming over-reliant on the mining sector.
Last financial year 26 per cent of WA’s revenue was from mining royalties compared with 15 percent four years earlier.
Despite election promises to the contrary, Mark McGowan has failed to diversify our economy.
Now more than ever, we must see funding directed to support economic diversification in areas including agriculture, aquaculture, innovation, future energy sources and high-tech manufacturing.
This will create long-term sustainable jobs and improve our unemployment rate that at 7 per cent is worse than the national average. There are now more than 240,000 people unemployed or underemployed. The pandemic has also exposed weaknesses in WA’s supply chains. We must be more self-reliant and self-sufficient, especially in areas such as critical minerals, defence, space, medicines and PPE.
For WA to attract business investment, which is vital to grow our economy and provide sustainable jobs, the McGowan Government must support common use infrastructure vital for many industries — not just short-term construction or maintenance work. If the Government is serious about grasping the opportunities presented by the defence industry, then the Budget must contain funding for the infrastructure necessary to allow full-cycle docking of the Collins class submarine to take place in WA.
This Budget is an opportunity to undertake serious and long-term
economic reform. I would like to see a plan for tax reform, to allow more small businesses to be eligible to choose their energy supplier, a cut in red tape and more investment in training, skills and development.
Given the 30 percent drop in trade apprentices under the Labor Government, the WA Liberals have committed $200 million towards apprenticeships should we win the next election.
And while the recent $600 Synergy credit giveaway for every household is good for West Australians under financial pressure, it could have been better targeted and doesn’t cover the annual $850 cost of living hikes Labor has inflicted on every WA household.
This Budget cannot be just about short-term stimulus. It must pivot the economy away from solely relying on the mining sector and deliver sustainable jobs for WA.
Most importantly, whilst providing more support for struggling households and small businesses, it must lay the foundations for the future prosperity of Western Australia.
Dean Nalder is WA shadow treasurer