Looking to diverge from its heavy reliance on iron ore royalties, the WA Government has announced a $463 million ‘economic diversification’ package, which it hopes will position WA as the “destination of choice for international education, tourism, business investment and trade”.
Iron ore still accounts for the lion’s share of WA’s royalties, posting $9.2 billion of the mining and resources sector’s estimated $12.7b in 2022-23.
Part of the State Budget announcement, the diversification strategy includes a $40m Sustainable Geoscience Investments package to accelerate critical minerals discoveries, an expansion of the New Industries Fund, as well as a $28m outlay to support the State’s invest and trade initiatives including a previously announced Trade and Investment Office in Austin, Texas.
It also includes $294m of additional investment in road, port and electricity infrastructure to help meet future capacity needs. The existing Industrial Land Development Fund will receive a $35m “top-up” towards planning and de-constraining initiatives to attract investment to Pilbara strategic industrial areas. Additional funding of $28m will be used for tourism initiatives, including attracting major and business events to Perth.
Industry calls for focused approach
Despite welcoming these initiatives, industry has called on the State Government to do more to diversify and grow WA’s economy.
“[The State Government] should remain open to do more given the transformative efforts from other economies, notably the US and Canada, to redirect capital flows to drive decarbonisation,” CCIWA Chief Economist Aaron Morey says.
Government needs to re-invest in WA’s resources sector and support emerging industries to drive future growth, says Warren Pearce, Association of Mining and Exploration Companies (AMEC) Chief Executive Officer.
“The Government needs to do more to grasp the opportunity to diversify while we still can,” Pearce says.
“Western Australia needs a more focused approach to diversifying our economy, and one that leverages off the strength of the mining industry, with investment in downstream processing to realise greater value from our resources here at home.
“In an increasingly competitive international environment, Western Australia needs to do more to incentivise international investment in value-adding.”
Premier and Treasurer the Hon Mark McGowan MLA says this latest commitment brings the total investment in economic diversification to more than $3.8b during this term of government.
“The Budget looks ahead to see what sort of jobs and industries our State – and the world – will need in the future,” says McGowan.
“The Government has been committed to continued investment to support new and diverse industries, attract investment to our State and further drive jobs and growth.”
Want to keep up-to-date with the latest business news and advice? Become a CCIWA Member today and get access to exclusive information designed to help you do business better. Find out more here.