CCIWA Chief Economist
Western Australia has reopened to the world; now begins the serious task of competing on the world stage. CCIWA’s biannual economic Outlook report is the only WA-based non-government forecast of our economy.
Released today, it shows our domestic economy is set for 3.75% growth in 2021/22, well ahead of pre-pandemic levels.
Record government stimulus is still working through the economy, with household consumption expected to hit 2.75%, and dwelling investment lifting to 10%. Strong commodity prices and upcoming projects like Scarborough and Pluto 2 will see business investment accelerate from 2% this year, to an expected 7.5% in 2022/23. With the State Government’s management of COVID-19, mining and consumer activity has continued comparatively freely, enabling the benefits to flow through the economy.
However, Omicron may bring the toughest phase of the pandemic for many businesses, combined with the prospect of interest rate rises dragging on confidence and spending. Businesses face delays and rising cost pressures including for energy, and we must prepare for commodity markets to one day turn. Mining has reached a record 47% share of WA’s economy, an over-reliance which demands significant refocus on diversification.
To this end, WA needs boldness and daring vision.
Only businesses and governments with the nerve to take on global markets, embrace skilled migrants and seize new trade and investment opportunities will prosper in a post-COVID world. Those who remain insular will be left behind, and WA has been slow out of the gates. We should reform the inefficient taxes constraining our dynamism and diversification, like payroll tax and stamp duty. Greater workforce participation could be achieved by reducing disincentives to working parents, particularly mothers. And we must seriously invest to rebuild our reputation as a welcoming place to study, travel, invest and do business.
Seizing international growth opportunities in a post-COVID world will be a very different task than weathering COVID – a difficult test, but who dares wins.