Today’s State Budget lays the building blocks for a strong Western Australian economy but fails to deliver on meaningful reform to help business.
The bumper $3.5 billion surplus for the current financial year, built on the back of WA industry and strong iron ore prices, shows the state’s economy is well-placed to weather global shocks from the Middle East conflict.
The surplus is forecast to drop but remains a healthy $2.4 billion for the 2026-27 financial year.
CCIWA Chief Economist, Dr Daniel Kiely, said the Budget can only build if businesses are supported to grow.
“This is a building block Budget that sets a strong foundation for future growth,” he said.
“On behalf of our members across every sector of the WA economy, we welcome the investment in housing and planning reform. However, we can’t build houses without apprentices and reliable fuel and energy sources.
“We’re also disappointed in the lack of action on payroll tax reform. Payroll tax is a handbrake on growth and urgently needs reform to ease pressure on small and medium sized businesses.”
The Budget featured some modest cost-of-living measures, including $100 fuel vouchers for every driver, and an extension of the WA Student Assistance program.
But it stopped short of offering any relief for businesses being crunched by fuel costs and supply chain challenges.
“The cost-of-living measures for households will help boost consumer spending without being inflationary, but sadly businesses won’t receive any direct support through this crisis,” Dr Kiely said.
“In March a CCIWA survey found 82% of WA businesses had seen their supplier costs increase as a result of the conflict in the Middle East, at a time when businesses were already being squeezed by high costs.”
Dr Kiely said the strong surplus underlines the importance of maintaining the current GST arrangements.
“If the current GST deal was scrapped, that would leave a $6 billion black hole in the state’s finances,” he said.
“This would directly impact the Government’s ability to fund services like hospitals and schools, and to build the infrastructure needed to support WA’s growing population.
“It’s vital that the GST deal is maintained to ensure that WA can cope with the growth needed to prop up the national economy.”
Dr Kiely said that while the increase in threshold for the stamp duty exemption for first home buyers was welcome, its impact would be limited.
“A more ambitious approach to stamp duty reform would go a long way to tackling housing affordability,” he said.
“Stamp duty impacts labour mobility because the cost discourages people from moving closer to where jobs are.”
The budget delivered some extra funding for apprentice wage subsidies but stopped short of providing much-needed increases to employer incentives.
“We’ve seen apprentice numbers drop dramatically and the best way to turn this around is by increasing incentives for the employers who take on the cost and risk of training these workers,” Dr Kiely said.
CCIWA welcomed the $19.6 million dollar investment in apprentice wage subsidy, but businesses will be disappointed that there is no increase to incentives on the employer side.
“We know that apprenticeship numbers have fallen dramatically and more substantial employer incentives would help address that,” Dr Kiely said.
“Employers take on the risk and expense of training the next generation of workers and at a time when costs and productivity are a challenge, more support is needed to ensure WA has the skilled workers it needs into the future.”
Investment in the energy transition was also welcome, with $1.4 billion for the Clean Energy Fund and $153 million to help businesses to decarbonise.
Dr Kiely said that while state debt is forecast to increase, WA still has the lowest debt in the nation, and the budget shows the economy remains strong despite global uncertainty.
