WA grows, countercyclical

West Aussies had a huge boost in purchasing power in the year to June, and the state’s economy grew despite a small national drop.

National GDP fell 0.3 per cent for the 2020 financial year, while WA’s increased 1.4 per cent, according to the Australian Bureau of Statistics.

The state was third of all jurisdictions, with Northern Territory (5.3 per cent), Australian Capital Territory (2.4 per cent) and Tasmania 0.3 per cent also posted rises.

But WA performed very strongly on a measure of per capita purchasing power.

That was demonstrated by a 6.7 per cent jump in real gross state income per capita.

“While GSP measures domestic production, the real purchasing power of income generated from that production is affected by changes in the prices of international and interstate imports and exports,” the ABS said.

“Real gross state income adjusts GSP for changes in a state's terms of trade. 

“Strong movements in commodity prices resulted in large variations in RGSI across the states and territories. 

“The largest increase was recorded in WA reflecting strong growth in iron ore prices and WA dominance in iron ore production and exports compared to other states and territories.”

Treasurer Ben Wyatt said it was a massive result for WA.

"The impact of COVID-19 will continue to be felt but the resilience of the WA economy is obvious," Mr Wyatt said. 

“The result highlights the momentum building in the WA economy prior to the impact of COVID-19 and why our economy has rebounded so solidly."

Commsec chief economist Craig James said few people would have guessed Northern Territory posted the highest GSP growth, at 5.3 per cent.

“But it shows the importance of strong growth of a key sector like energy in a relatively small economy,” Mr James said. 

“The Bureau of Statistics noted that mining gross value ‘increased 39.7 per cent driven by oil and gas extraction, reflecting the transition from construction to production of LNG in the territory.’

“All Australian economies were affected by COVID-19 over the March and June quarters with some economies also affected by bushfires.

“The Reserve Bank governor recently said that Australians had much to be thankful for. 

“And the latest (Household, Income and Labour Dynamics in Australia Survey) outlines some of these things. 

“For instance poverty levels continue to ease, wealth has continued to rise over time but inequality has not deteriorated – in fact it improved over the last four years that we have records.”