A world of uncertainty: McGowan

08/10/2020 - 14:29


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A second wave of COVID-19 in Western Australia remains the single biggest threat to the state’s economy, according to Premier Mark McGowan.

Mark McGowan argued the state's $1.2 billion operating surplus would bolster WA’s COVID-19 response if an uncontrolled outbreak were to eventuate. Photo: Gabriel Oliveira

A second wave of COVID-19 in Western Australia remains the single biggest threat to the state’s economy, according to Premier Mark McGowan.

That declaration, made this afternoon before the release of the state government’s 2020-21 budget, comes after the federal government’s budget, released on Tuesday, indicated its estimates were made on the assumption WA’s domestic border effectively would be reopened by April.

While the state government’s budget assumes domestic border restrictions would be removed by the second quarter of 2021, Treasurer Ben Wyatt said this did not reflect the state government’s policy.

The papers also assume the international border will reopen by December of next year.

No assumption was made about if or when a vaccine would be widely available.

Addressing reporters ahead of the budget’s release, Mr McGowan defended the state government’s budget’s $1.2 billion operating surplus, arguing it would bolster WA’s COVID-19 response if an uncontrolled outbreak were to eventuate.

He said this approach was appropriate, given WA was surrounded by what he referred to as a world of uncertainty.

“The biggest threat to WA is a second wave of coronavirus,” Mr McGowan said.

While the state government reiterated its support for retaining border restrictions, Mr Wyatt said the domestic border’s reopening would have a marginal impact on the state’s finances, regardless of whether it reopened or not by the projected dates.

The budget estimates that, should the state experience a second wave of COVID-19, WA would likely go into lockdown for six weeks at a cost of $5.6 billion and 30,000 jobs to the state’s economy.

Mr Wyatt said although the mining sector would likely operate unaffected in this scenario, consumer and business confidence, which had mostly recovered to pre-pandemic levels, would be severely affected.

He declined to speculate on when border restrictions would be eased.

“We’ll continue to follow the health advice and following the health advice has provided us the best economic outcomes in Australia,” Mr Wyatt said.

It’s all about jobs

Today’s comments come after the state government announced in late September that it had recorded a budget surplus of $1.7 billion over the past financial year.

The opposition immediately criticised that announcement, with shadow treasurer Dean Nalder yesterday telling Business News the state government was leaving the federal government to do the heavy lifting in WA’s economic recovery.

Mr Wyatt, however, defended the state’s economic performance in state parliament this afternoon, arguing that the domestic economy growing by about 1 per cent over the past financial year was both unprecedented and proof it was strong enough going into the crisis.

All other states are thought to have contracted economically by between 0.1 to 2 per cent this past financial year.

“[O]ur economy is bouncing back solidly,” Mr Wyatt said.

“Business and consumer confidence in WA have rebounded to pre-COVID levels.

“But we have more work to do to return every Western Australian who wants a job back into a job.”

Today’s budget estimates the state’s economy is expected to grow by 1.3 per cent over the current financial year, in part due to an overall recovery in household and business confidence.

And although the state is expected to record a $1.2 billion operating surplus over this period, the state government has said it has shifted its focus away from debt reduction and towards job creation.

That includes through the state’s asset investment program, which is set to receive $27 billion over the forward estimates.

About $12 billion of that will go towards road and rail projects, including those associated with Metronet, while about $7 billion will go towards electricity utilities and Water Corporation.

Mr Wyatt had previously said every cent of the state’s surplus would be spent on the program.

WA Police is set to be one of the largest beneficiaries over the current year, with its funding estimated to almost double, from $62 million to $141 million.

That’s on top of an additional 800 police officers funded at a cost of $314 million.

The state government said it expects WA to have the highest number of police officers per person of all states and territories in Australia as a result of these new hires.

Other initiatives to be funded include $475 million for housing construction, $492 million for new schools, $127 million for renewable energy technologies, $260 million for road and rail infrastructure, and $150 million for tourism initiatives.

Pandemic relief programs totalling $5.5 billion over the current financial year will also be funded, including:

  • $330 million for industry development;
  • $319 million for social housing;
  • $205 million for small business and charity electricity tariff offset;
  • $205 million for payroll tax exemptions on JobKeeper payments;
  • $165 for payroll tax waiver;
  • $147 million to fund $20,000 building bonus grants;
  • $116 million for regional land booster package;
  • $107 million for $17,500 grants to small and medium-sized businesses;
  • $99 million for local manufacturing;
  • $86 million for renewable technologies;
  • $71 million for arts and culture;
  • $62 million for expanding free short courses;
  • $50 million for waiving small business licence fees;
  • $46 million for securing food industry;
  • $31 million to support construction workforce;
  • $29 million for environment online and biodiversity information office;
  • $24 million for rent support for tenants of government agencies;
  • $15 million for land tax assistance grant program; and
  • $3 million for grants to travel agents.

In his remarks to state parliament this afternoon, Mr Wyatt said WA was safe and strong and that its economy was the envy of the nation.

“[W]e are comfortable with our position looking north and west into a world of opportunity knowing that we have much to offer a world looking for confidence and certainty,” he said.


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