WA business wants job security

27 July, 2017

Western Australia’s peak business advocate has issued a warning to the McGowan Government ahead of its first state budget, that new or increased taxes, fees and charges would result in job losses.

The Chamber of Commerce and Industry of Western Australia (CCI) has today released its pre-budget submission which calls on Premier Mark McGowan and Treasurer Ben Wyatt to return the government to its pre-boom size by reducing expenditure growth to pay down the State’s $42 billion debt and regain its AAA credit rating.

CCI Chief Economist Rick Newnham said any job losses as a result of the state budget will be in direct conflict with the McGowan Government’s election mandate to boost employment in WA’s private sector.

“We have witnessed reckless public spending in recent years and as a result WA governments have spent more per person than any other state in Australia,” Mr Newnham said.

“In fixing the budget the McGowan Government has two options; increase taxes or reduce spending.

“It is a culture of spending that dropped us in this mess and the obvious choice, which will give our WA economy a fighting chance of recovery, is spending restraint.”

According to CCI’s pre-budget submission, last year the previous WA Government spent $11,093 per person which is well above other large states including Victoria ($8,947 per person) and New South Wales ($9,010 per person).

“As a result of the higher spending, the size of the WA government has blown out from 7.2 per cent of the economy in 2000, to 10.4 per cent today,” he said.

“The anomaly is that compared to other states, WA’s tax regime is appropriate, but its spending has been completely out of sync with its revenue,” he said.

Mr Newnham said four out of five WA jobs are in the private sector and businesses must feel certain and confident in the economic environment to maintain staffing levels and create new jobs.

“If the State Government is truly committed to creating new employment opportunities and state growth, it should not slug businesses with new or increased taxes, fees or charges,” he said.

A recent CCI member survey has revealed that the  government-owned assets the WA business most supports the sale of include TAB, Gloucester Park and Western Power.

“Asset sales should still remain on the table as a vital way to reduce debt and regain WA’s AAA credit rating,” Mr Newnham said.

The CCI submission acknowledges and applauds that the McGowan Government has made efforts to achieve savings by streamlining government departments, committing to strict wages policy and taking steps toward reducing electricity subsidies, which cost WA taxpayers more than $300 million per year.

Mr Newnham said the long-term goal of the State Government should be to create new jobs through payroll tax reform, once the domestic economy starts moving from recovery into growth.

“While payroll tax reform remains the number one priority of the WA business community, the dire state of the WA budget means the current tax rate and threshold should be maintained until the domestic economy begins to grow again,” he said.

“Our forecast is that we should see growth of 2.5 per cent next financial year, but any increase in taxes, fees or charges on business will put that at significant risk.”

“The State Government has a massive challenge ahead and we look forward to continuing to work with Premier McGowan and Treasurer Wyatt on job creation and budget savings measures in future,” Mr Newnham said.

View CCI's pre-budget submission here.

Media contact:

Simon Bailey

Counsel Communications

+61 400 248 880