WA is on track for a multi-million-dollar surplus in its upcoming State Budget, while other states face economic crises as a result of the global pandemic.
Media reports indicate that WA Treasurer Ben Wyatt will announce a surplus for 2020-21 in the October 8 budget, whereas Queensland expects a $13 billion deficit.
Both New South Wales and Victoria are expected to report multibillion-dollar deficits.
Media reports suggest WA’s State debt is expected to be higher than the $36b forecast in December, while the surplus will be significantly lower than the $2.7b in the mid-year review.
Wyatt told media that the priority in COVID times was West Australians and the future prosperity of the State rather than surpluses or deficits, but the government’s strong financial position pre-pandemic would enable it to be in a surplus.
CCIWA chief executive Chris Rodwell said it was rare to secure a budget surplus during an economic crisis and it “posed a conundrum for the government”.
“There will be calls for the Government to expend any surplus funds in this year’s budget, but the best approach is to invest in strengthening the economy overall and fostering business investment,” he says.
“We must be mindful that WA could still hit 11 per cent unemployment, meaning 160,000 Western Australians out of work. We have just had our most severe quarterly economic contraction on record, bringing our domestic economy back to the size it was in 2010.”
WA’s unemployment rate sits at about 8.7 per cent, up from 8.1 per cent in May and the second-highest to South Australia which recorded 8.8 per cent in June.
CCIWA’s economists in June estimated that WA’s unemployment rate could reach 11 per cent during the pandemic.
“As Reserve Bank Governor Phillip Lowe has wisely noted, any additional fiscal stimulus should come in the form of more efficient and competitive taxes, which would invigorate the whole economy and support the creation of more jobs and opportunities for Western Australians,” Rodwell adds.
CCIWA’s recent pre-budget submission is campaigning for the State Government to give voice to WA business and focus on key areas including retail trading hours, tax, skills, Industry 4.0, energy costs, regulation and international engagement.