2021-22 Pre-budget submission

Seizing the opportunity to diversify

The WA economy has enjoyed extraordinary success during the COVID19 pandemic, primarily due to booming global commodity markets.

But as sure as the sun rises tomorrow, commodity markets will one day turn. Many expect we have a few years at best.

Reforming an economy takes time, so WA must take the opportunity now to diversify.

Our Pre-budget submission includes recommendations that will enable WA businesses and the community to capitalise on our success in managing COVID-19.

Keep the costs of doing business low

Reduce the tax burden on business to attract investment to WA

Lumped with the heaviest payroll tax burden in the country, it is no wonder the WA economy is failing to diversify. Nearly half of large Australian businesses say our payroll tax regime significantly affects their perception of WA as an attractive place to expand.

We recommend the Government increase the payroll tax threshold to $1.2 million and introduce a 15 per cent rebate on payroll tax liability for organisations with taxable wages below $4m. The rebate would taper down to zero for organisations with taxable wages at $7.5m.

This proposal removes disincentives to employ West Australians and offers a way to unlock more business investment, innovation and diversification in our economy.

Unleash the benefits of harmonised Workplace Health & Safety laws

Commencement of the Work Health and Safety Act 2020 in January 2022 will be the biggest change to our occupational safety and health system since the 1980s. But with less than six months until its implementation, employers are unable to update their safety systems and practices due to delays finalising the regulations and a lack of information about what the changes will mean for organisations and workers.

Harmonisation is intended to make it easier to do business in WA, but to achieve this benefit Government needs to provide the necessary funding to:

  • Provide WorkSafe WA with increased resources to provide quality education and support activities.
  • Reintroduce the successful ThinkSafe Small Business Assistance Program to provide employers with independent advice on the new system and what they need to do to ensure safe workplaces.

Ensure a skilled workforce and efficient infrastructure

Reform kindy funding to boost women in the workforce

The way kindy is funded and operated in WA is preventing mothers from fully participating in the workforce. WA parents describe the kindy year as a “logistical nightmare” and “the year from hell”, leaving many WA women with young children working fewer than 20-hours a week.

We strongly encourage the Government to commit to reforms recently announced by the Commonwealth to the National Partnership Agreement on Universal Access to Early Childhood Education. The reforms would see $1,340 in Federal Government funding passed on to every child regardless of whether they attend kindy at school or centre-based day care.

The reform will give parents more choice over where they send their children to kindy and go a long way to enabling WA mothers to work more hours. And in the context of the State’s skills shortage crisis, we need to do everything we can to make it easier for parents to work more.

Allow all businesses to choose their electricity retailer

The Government is successfully rolling out energy reforms that will ensure reliable access to energy into the future.

However, many small and medium-sized organisations continue to be prevented from choosing their electricity retailer, which pushes up their energy costs.

We recommend the Government provide choice and price competition for all businesses by changing the retail electricity market contestability threshold and enabling organisations on sub-meters to choose their electricity retailer.

Ensure regulation helps, not hinders, innovation and investment

Invest in digitising regulatory services

The slow pace of the WA public sector’s digitisation is increasing the costs of doing business in WA compared to elsewhere. The WA Government has fallen behind most other jurisdictions on measures of digital readiness, making WA a less attractive place to do business.

We recommend the Government include significant funding in the budget for implementing the Digital Strategy for the Western Australian Government 2021-2025.

Funding this strategy properly will create opportunities to improve processes across multiple industry sectors, enabling organisations to focus on their operations and diversifying our economy.

Remove trading restrictions for a thriving retail sector

Western Australia’s restrictions on retail trading hours are a textbook example of government red tape unnecessarily holding back the vitality and liveability of our community, while stifling WA jobs in the process.

We are calling on the State Government to undertake incremental reforms that are easy to implement, have no costs attached to them and would push WA’s economic diversification in the right direction.

As a first step, we recommend the Government:

  • Open up Sunday morning trading by allowing all shops to open at 8:00 am.
  • Extend Saturday evening trading.
  • Formally enact Public Holiday trading extensions.
  • Remove the outdated regulations that stipulate what a business can sell at a particular time.

Position WA as an attractive place to invest

Reframe our approach to international trade and investment

Currently WA has no clear strategy for making a hard press into key trade and investment markets. One area that requires a strong focus is the United States. Despite being WA’s largest investment partner, WA has no trade and investment office there.

We recommend the Government immediately undertake a strategic assessment of where WA needs to focus its trade and investment efforts. It should consider Austin as a location for a new trade office, given its proximity to both the resources sector, and emerging tech industries.

Develop a comprehensive WA Investment Deal Book

There is an opportunity to fill the vacuum in global investment and trade markets by strengthening the value proposition for foreign organisations to invest in WA.

This would help us to re-integrate into the global economy, and capitalise on the opportunities created by organisations rethinking global supply channels and investment priorities.

We recommend that the Government develop an online Investment Deal Book — a comprehensive and consolidated resource for foreign direct and interstate investors looking to invest in WA, with content made available for multiple platforms and updated regularly.

Address WA’s skills shortages

Four in five WA organisations are struggling to find the skills they need, and they need people with at least three years’ experience to fill vacant roles.

The Government must take immediate actions to address this crisis:

  1. Pilot trials and expand efforts to bring back international workers and students outside the international arrivals cap.
  2. Allow home quarantine for vaccinated returning Australians and invest in more government run quarantine capacity.
  3. Increase the international arrivals cap at the earliest opportunity.
  4. Pull out all stops to accelerate the vaccine roll-out in WA.
  5. Once the majority of WA’s population has had the opportunity to be vaccinated, only lockdown in response to variants that vaccinations don’t protect against, and stop closing interstate borders and requiring interstate arrivals to quarantine.
  6. Explain its approach to future outbreaks and local lockdowns, so that businesses can better plan for these events.
Making paid work pay for families

Making the most of the workforce we have available is more important than ever. And for WA, the scope for gains is enormous.

Workplace Health and Safety

Cost-effective solutions to manage your WHS needs, reduce the risk to your workers and help you meet WA WHS laws.

CCIWA Budget Breakdown

To get spin-free insights the day the budget is released, join Chief Economist Aaron Morey for the CCIWA Budget Breakdown.