Treasurer confident in WA economy, despite risks

WA Treasurer Ben Wyatt has emphasised his confidence in the state’s economy, despite the ongoing risks of the US-China trade war and international shocks such as Brexit.

Speaking at a Business News Treasury breakfast and addressing the topic of strengthening WA’s economy in the face of emerging global risk, Mr Wyatt flagged a state budget on May 9 likely lacking in surprise news or big ticket items.

Mr Wyatt acknowledged his budget would probably be overshadowed by a Federal Election days later and that his priority remained “budget repair.” Premier Mark McGowan has already announced an expected return to budget surplus in the 2019/20 financial year, while Mr Wyatt told today’s event that increased iron ore prices caused by the Brazilian tailings dam disaster would provide for only a small and temporary revenue boost.

Other key talking points from Mr Wyatt’s address:

Growing protectionism, particularly the US-China conflict, may result in an estimated revenue hit in WA of $245 million this financial year and $422 million the next. But it’s not seen as likely to have a huge impact and the Treasurer still expects common sense to prevail in the interests of economic prosperity.
The China relationship is crucial to WA, especially given the blocking and custom delays currently being experienced in relation to Queensland coal. Could the same happen to our iron ore? The Treasurer noted there was no trouble getting state ministers Chinese visas (unlike restriction placed on some federal counterparts) and that a Chinese shortage of iron ore – they import 90 per cent of their needs – meant demand for our product should stay strong.
Lithium Valley and the battery materials sector have huge potential for WA. China’s shift towards renewables and electric vehicles only serves to heighten this optimism. The government is encouraged by the investment already flowing into the state and is prepared to work closely with industry, while it is expected a New Energy Co-operative Research Centre will be awarded to WA in the near future.
WA’s priorities need to include equipping its workforce with a variety of different skills – there needs to be a STEM strategy and reforms to vocational educational training, with a focus on automation. There remains room (and a requirement) for economic diversification around agriculture, education and tourism, including ecotourism.

“A country gains from reducing its own trade barriers” @benwyatt at @wabusinessnews breakfast. pic.twitter.com/zSLrppiyOW

— Sandra Brewer (@SandraBrewerWA) February 28, 2019

The Treasurer closed by saying that WA had many reasons to be optimistic about its economy and was better-positioned than any other state to capitalise on Asian-Pacific growth.

“The WA economy is growing,” Mr Wyatt said.

“Business investment is up after four years and business confidence is the highest it has been for six years. There is no reason why we can’t thrive.”

Jennifer Kirk is an Associate Director in Cannings Purple’s Government Relations team and spent more than seven years working for the Commonwealth government, including leading stakeholder and regional engagement on important economy policy reform during her time in the Treasury’s Perth office. Contact Jennifer.

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