STATE BUDGET ANALYSIS 2023
OUR VERDICT
The State Government has delivered a “steady as she goes” Budget.
The 2023-24 State Budget confirms the current strength of the WA economy, but highlights risks to the outlook as growth is forecast to plummet in coming years.
On the reform front, some of the critical initiatives that CCIWA has called for have been delivered in this Budget, including a battery infrastructure to support decarbonisation, a boost to the Digital Capability Fund to support more digital services, an Invest and Trade WA Hub in Texas, and some important initiatives to address workforce shortages, including visa programs and increased funding to support employees in taking on apprentices and trainees.
These are welcomed measures.
But there are bigger reform opportunities still on the table, including a more competitive payroll tax system, and doing more to support small and medium businesses to decarbonise. The State Government should also remain open to support decarbonisation given the transformative efforts of other economies, notably the US and Canada, which are clearly redirecting capital flows.
All up, the WA Government has delivered initiatives that address some of the key issues facing WA including, cost pressures, housing shortages, decarbonisation and diversification. However, there is much more to do. We look forward to working closely with them on driving more reform opportunities.
This is in partnership with Australian Retirement Trust
BUDGET BY NUMBERS
Commodity royalties skyrocket to help deliver $4.2b surplus in 2022-23.
Western Australia’s economy – measured by Gross State Product – is expected to grow by 4.25 per cent this financial year and 2.25 per cent in 2023-24.
If this growth is achieved, it will be the strongest since 2013-14, supported by a lift in exports across a range of mining commodities, along with agricultural exports following a record harvest this year.
WA’s labour market is expected to remain tight over the next couple of year, with unemployment to average 3.5 per cent in 2022-23 before rising to 4.0 per cent in 2023-24 and 4.25 per cent in 2024-25.
Inflation remains high, expected to reach 5.75 per cent to end 2022-23. However, this is expected to ease over the next two years, falling to 3.5 per cent in 2023-24 and 2.75 per cent in 2024-25.
Soaring commodity prices and transport grants provided by the Commonwealth Government have boosted the State’s financial position, with the WA Government expected to print a final operating surplus of $4.2b this financial year and $3.3b in 2023-24.
The Government is expecting to record a cash surplus of $1.4b this financial year. Cash deficits are forecast until 2024-25, primarily reflecting conservative iron ore price forecasts and a ramp up in the Government’s asset investment program.
BUDGET HIGHLIGHTS
Capitalising on climate opportunities and pushing back into overseas markets
INDUSTRY SUPPORT
Electricity Credit
- To assist households and small businesses with cost pressures, the WA State Government (in conjunction with the Commonwealth) will deliver a $400 electricity credit for households, plus an additional $326 for high needs households, and $650 credit for small businesses who use less than 50MWh of electricity per annum. This will benefit approximately 90,000 small businesses.
Payroll Tax Reform
- Unfortunately, the WA Government missed the opportunity to reform payroll tax to make it easier to do business in WA.
Worker initiatives
- $26.9 million to support employers of apprentices and trainees in the Building and Construction sectors; base employer grant under the Construction Industry Fund up from $10,000 to $12,000 per eligible apprentice
- $11.5 million for visa subsidies of up to $10,000 to attract skilled migrants to the Construction Sector
- $4.2 million to encourage completion of apprenticeships and traineeships in the building and construction industry through a $2,000 completion payment and $500 tool allowance.
INFRASTRUCTURE
Climate Change
- $2.7 billion for Synergy to build battery storage capacity (including the Collie Battery Energy Storage System, 500MW, and the Kwinana Battery Energy Storage System 2, 200MW).
- Develop 210MW of wind generation capacity including the King Rocks Wind Farm and a proposed expansion of Bright Energy Investments’ existing Warradarge Wind Farm.
- $196 million to build WA’s third desalination plant at Alkimos, and deliver a range of other climate initiatives.
Housing
- $750 million directed at housing and homelessness needs of the State, including $450m top up to Social Housing Fund. This is expected to bring the total number of social housing up to 4000, taking pressure of WA’s rental market.
- Extended off the plan apartment rebate to mid-2025
Health
- $2.7 billion spending in health, including $544m for the new Women’s and Babies Hospital. Several initiatives aimed at boosting workforce shortages, particularly in regional WA.
Transport, Roads & Ports
- $136 million for essential projects that will increase port capacity and diversify exports.
INDUSTRY DEVELOPMENT
- $294 million of additional investment in road, port and electricity infrastructure to support economic development and diversification.
- $40 million Sustainable Geoscience Investments package to accelerate critical minerals discoveries to help meet demand for minerals used in new battery technologies.
- $35 million top-up of the Industrial Land Development Fund to support private sector investment aimed at planning and de-constraining initiatives to attract investment.
- $28 million to support the State’s invest and trade initiatives, including establishing a new Invest and Trade WA Hub in Texas to enhance our relationship with the Americas.
- $22.5 million to accelerate the environmental approval process for green energy proposals
- $253 million being allocated the Digital Capability Fund, which will deliver 30 ICT initiatives that improve digital service delivery.
- $28 million to build the State’s trade and investment initiatives, including establishing a new Invest and Trade WA Hub in Texas to enhance our relationship with the Americas.
2023-24 Pre-Budget Submission
CCIWA will continue to fight for reforms that advance trade and commerce in this State. To view the full suite of our policy recommendations to the State Government, download our pre-budget submission.
WA Investments
WA Investments offers an investment pathway to take projects to the next level and for investors to seize their next opportunity.
IR Laws Reforms
Industrial relations reforms will affect WA businesses. Be prepared to meet the requirements for upcoming deadlines.
Climate change
Climate change is one of the most significant challenges of our time, changing the way we live and how we do business.
