WA would have been in recession during the past year if State Government had not intervened, Chamber of Commerce and Industry economist Nick Cusworth said at the Australian Property Institute’s annual State conference.
A huge downturn in mining and private investment in what had traditionally been an engine of growth affected the whole economy, Ms Cusworth said.
“It would probably have had even a more dramatic effect but for what was happening to growth in government spending,” she said.
More than $3 billion of budgeted capital works for the Government set a record in 1999-2000.
“The State Government went on a spending spree – in part because it knew that without
public spending there would have been a good chance that WA would have been in technical recession,” Ms Cusworth said.
“Therefore, the combination of what the Government was doing and what was happening in the housing sector basically kept the economy afloat even though other parts of the economy were going through the worst recession ever seen.
“The two things which probably kept our head above water and kept us out of recession over the course of the last year were residential building and State Government spending.”
