Open Australian economy outpaces WA
Today’s national accounts show that Western Australia’s economy has made a partial recovery, while being outpaced by stronger growth in the other States.
Western Australia’s State Final Demand rebounded 4.9 per cent in the September quarter. This makes up much of the ground lost during the whopping contraction in June, bringing our domestic economy back to the size it was in mid-2019.
But only Victoria recorded weaker growth in the September quarter than WA, due to their debilitating lockdown.
Comparable economies like Queensland and South Australia are recovering much faster at 6.8 and 6.7 per cent respectively. Notably, these economies also recorded smaller contractions than Western Australia in the previous quarter.
A key factor driving WA’s growth performance in the September quarter was the revival of household consumption, surging by 11.7 per cent. The biggest contributors to consumption growth was spending on health services, as well as spending on hotels, cafes and restaurants. However, it is concerning to see that business investment in Western Australia – a key component for growth – has declined again, collapsing a further 4.9 per cent.
Repairing and stoking WA’s weak business investment remains a vital priority for our economic recovery. Despite comparatively slow growth, WA has the strongest fiscal position in Australia. Our State can therefore afford to put shoulder to the wheel and commit to achieving more competitive tax conditions, to better attract investment and cultivate growth.
