Western Australia’s economic recovery has taken another hit, with the domestic economy contracting by 0.3 per cent in the December quarter – the largest decline of any state.
The 0.3 per cent decline in state final demand follows slight growth in the September quarter of 0.1 per cent – revised down from 0.4 per cent growth.
The State’s domestic economy has been nudged into the red on the back of declining business investment which fell by 5.4 per cent, driven by falling non-dwelling construction which fell by 7.2 per cent.
The fall in business investment is on track with the Chamber of Commerce and Industry WA’s Outlook forecast, which expects business investment to fall by 15 per cent across the 2018-19 financial year, as the last of the major LNG projects are completed.
While it is concerning that business investment is falling and jobs are being lost, this has been a long time coming because these major projects have now come to an end. This makes it more important than ever for the State Government to reduce its tax on small business jobs so new jobs can fill the gap.
It’s positive to see that WA households are loosening their grip on their wallets, with household consumption growing in the December quarter – up 0.4 per cent, which is an improvement on the 0.15 per cent decrease in the previous quarter. Four out of five consumers (82%) expect the WA economy to improve or remain unchanged this quarter, according to CCI’s latest Consumer Confidence Survey.
Four out of five WA jobs are created by business which means making it easier for small business to create jobs is critical, particularly now that WA has the equal highest unemployment rate in 17 years. WA has the highest jobs tax of any state making it more expensive to create a job here than anywhere else in the country.
CCI urges the Government to reduce the payroll tax burden for small business to boost job creation and turn this 17-year high unemployment rate around.