15/11/2019 - 10:55

McGowan sets sail with WA-first plan

15/11/2019 - 10:55

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A new investment office and tighter rules around local content on major projects are some of the latest moves in Mark McGowan’s economic strategy.

McGowan sets sail with WA-first plan
Mark McGowan tells a Business News breakfast audience the state government has a broader stimulus plan for the WA economy. Photos: Gabriel Oliveira

A new investment office and tighter rules around local content on major projects are some of the latest moves in Mark McGowan’s economic strategy.

Premier Mark McGowan believes there’s a 50-50 chance Western Australia could win a $1 billion a year submarine maintenance package, with an announcement possible in weeks.

The state government has been lobbying to shift mid-life maintenance work of Collins Class submarines from South Australia to shipyards in Henderson by the middle of the 2020s.

It’s one part of the government’s economic strategy, which also includes minor tax cuts, and bringing forward maintenance work.

Speaking at a Business News breakfast yesterday, Mr McGowan added a new Invest and Trade WA office and tighter rules around local content for major projects to the list.

Mr McGowan said the federal government would announce its position on the maintenance work in December, after a review earlier this year.

“The Collins Class submarines literally sail from HMAS Stirling at Garden Island ... past Rottnest, past Cape Leeuwin, across the Great Australian Bight to Adelaide,” he said.

“Its very debilitating for the crews and frankly, stupid.

“The South Australian premier (Steven Marshall) wouldn’t know a submarine from a limousine, or a periscope from a stethoscope.

“If it’s done on merit they’ll come here.

“The industry here is far more sophisticated, far more private sector oriented, our shipbuilding, oil and gas industries and the like are world competitive.

“Adelaide is totally focused on just winning Commonwealth contracts, that’s all they do.”

South Australia’s Osborne shipyards have been the hub of defence shipbuilding for decades, and were selected for assembling the new Anzac class frigates and Attack class submarines.

Mr McGowan said the $90 billion building spree would be very demanding on SA’s limited industrial base.

Aggressive approach

He also revealed a new office in the Department of Jobs, Tourism, Science and Innovation to work aggressively to attract investment into WA.

Invest and Trade WA had already fielded 70 inquiries, Mr McGowan said, with an online portal to be set up next year.

The state had previously been waiting for investors to come here, he said.

“(It’ll be) the front door to come in, and say ‘we’ve got this amount of capital to invest, in this sort of project, can you help us,’” Mr McGowan said.

“It’s about projects of significance, to get them through.

“When we came to government I gave the department this anecdote, that I heard constantly.

“SA allegedly had a system by which, if you want to invest in SA, projects $20 million to $30 million, you can actually contact them, they’ll ensure people are there to meet you when you arrive at the airport.

“If it’s a significant size, the minister will be there with a car.

“(They’ll) take you to an office, sit down and hear about it.

“I said to the agency, I want us to do something similar.”

Business News columnist Peter Kennedy asks the questions.

An example of how the office would work was when an international business approached the government with plans to build a customer service centre in a location outside Perth CBD.

The new office reached out to local governments to coordinate parking and approvals, and to TAFE campuses for training.

“We’re going on the front foot, chasing opportunities, rolling out the red carpet for (whoever) wants to invest in WA,” Mr McGowan said.

He also flagged changes to local content laws.

In 2018, the government passed a bill lifting requirements for state government spending initiatives, with new rules to give opportunities to local suppliers and write content conditions into contracts.

That had created a mini industry of advisers assisting bidders to offer local content in tenders.

A new law affecting the private sector was under consideration, he said.

“The skilled local jobs bill is about making sure that there is a greater requirement to consider WA, you can’t mandate, but to consider WA suppliers, training and the like when major projects are put in place,” Mr McGowan said.

“We don’t want to discourage major projects, but we want to make sure we maximise the benefit of them.”

All of this added to a number of recent stimulus initiatives, Mr McGowan said.

From January, the payroll tax threshold will be lifted from $850,000 to $900,000, and then in 2021, to $1 million. Stamp duty rebates of 75 per cent have been announced for purchasing apartments off plan.

A $54 million package will discount TAFE fees for priority courses for two years, while $280 million was allocated to speed up maintenance at schools and hospitals.

“Just last week, every public school in WA received the first wave of funds in their bank account to undertake extra works,” Mr McGowan said.

He said debt would also be under control.

“We are the only state in Australia where debt is coming down,” Mr McGowan said.

“With WA achieving credit ratings upgrades … we’ll be spending $20 million less each year on interest payments, showing that there is a dividend for good financial management.”

One big reform was off the agenda, however.

In 2017, former energy minister Ben Wyatt announced a goal to introduce competition into electricity retailing, but Mr McGowan said there were no intentions to pursue that reform now.

Business News director of strategy Mark Pownall and Fortescue chief executive Elizabeth Gaines.

China

Mr McGowan’s harshest criticism was of federal politicians in their handling of the relationship with China, naming member for Canning Andrew Hastie and Home Affairs Minister Peter Dutton.

He said the government could take up human rights issues with China but could be more subtle.

“To go public and call them Nazis … or Mr Dutton screamed at them publicly, is stupid, ridiculous, it’s not diplomacy it’s just immaturity,” Mr McGowan said.

Mr Dutton said they don’t share our values, well lots of countries around the world have different systems, different values to WA.

“Do we say, we’re not going to trade with you because you’ve got different values?

“I don’t think that’s a wise way of progressing these issues.

“For anyone in WA, particularly at a senior level not to understand that is unforgivable.”

Mr Hastie had previously written that Australia was strategically unprepared for the rise of China, much as France had been for Germany in the 1930s.

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