13/02/2007 - 22:00

Time to get on with sharing the wealth of our economic boom

13/02/2007 - 22:00

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Western Australia’s remarkable run of good economic news continued this month with the unemployment rate falling to the lowest level since official records started 30 years ago.

Western Australia’s remarkable run of good economic news continued this month with the unemployment rate falling to the lowest level since official records started 30 years ago.

The national unemployment rate of 4.5 per cent is remarkably good; WA’s unemployment rate of 3 per cent almost defies belief.

Not surprisingly, Premier Alan Carpenter was glowing when he addressed CEDA’s Economic and Political Overview seminar this week, telling the audience WA has never been in better shape.

Rapid economic growth creates its own set of challenges, with finding skilled staff and providing suitable economic and social infrastructure among the main issues facing business and government in WA.

Ensuring the benefits of the boom are widely and equitably spread is another challenge.

To some degree, the boom creates its own solution to this issue. As the economic cake gets bigger, there is more prosperity to share across the community.

In reality, the benefits of the boom do not flow equitably through the community and pockets of disadvantage remain.

One example of this is the residential housing boom.

The surge in house values has been great news for property owners and, in particular, property investors.

But it has also created a crisis in housing affordability – not just for home buyers but also for renters.

The government has acknowledged this is a problem and has foreshadowed action, with land releases to be accelerated and stamp duty to be reduced.

The shared equity scheme launched by the premier this week – which was foreshadowed in WA Business News earlier this month – is another step in addressing the issue.

The changes are welcome but more could be done, and action could be taken faster. 

This would include substantial tax cuts following the extraordinary revenue surge enjoyed by the state government.

It’s a shame the government is blatantly trying to time tax cuts to suit its political agenda.

Tax cuts are always great news on the eve of an election, but many voters will view the eventual tax cuts with cynicism because they have had to wait so long for them.

Under-Treasurer Tim Marney reminded the audience at the CEDA seminar of another perennial challenge in WA – addressing the chronic disadvantage faced by indigenous Australians.

Mining and contracting companies operating in regional WA are investing time and money to try and improve the lot of indigenous Australians.

This includes education and training schemes that hopefully will have a lasting impact.

These investments will help industry, by providing a local source of labour, but they also reflect a recognition by most companies of their social obligations.

Native title is often seen as a precursor to lifting the stature and quality of life of Aboriginal people.

Whether or not that is the case, it is frustrating that native title has become bogged down in the judicial system.

The many long-running native title cases in Australia are enriching lawyers but doing little for the people they are meant to help.

Decisive political action would be a far better outcome.

 

New-look Business Class feature

This week’s edition includes a re-launch of our monthly Business Class feature.

Aviation writer Geoffrey Thomas will continue to contribute to the feature, which is being co-ordinated by senior journalist Julie-anne Sprague.

It extends the paper’s coverage of travel and aviation to leisure and lifestyle trends relevant to people living and working in Western Australia.

Rio Tinto Iron Ore chief executive Sam Walsh bravely agreed to be the first business executive to share some of his travel and holiday experiences and reveal his favourite destinations, both in WA and overseas.

The feature also looks at holiday homes in the South West, a luxury resort that is expanding, and health retreats that can help overworked executives recharge their batteries.

It’s an eclectic mix that will introduce our readers to a different side of business in WA.

 

Tax pressures continue

Business Class has a leisure focus but the hard-nosed issue of tax reform intruded into this feature.

Rising property values in coastal WA have left many people with rapidly escalating land tax bills on their holiday homes and investment properties.

The escalation has been exaggerated by the impact of bracket creep, and means the percentage rise in land tax is out of proportion with the increase in property values.

Many of Perth’s well-heeled have properties in the South West but not all property owners have large incomes.

Higher land tax assessments have been tough news for people who don’t have the cash flow to pay the increased tax bill and potentially will have to sell their properties.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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