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WA’s reliance on mining grows – State Accounts

CCIWA Chief Economist

Aaron Morey

Western Australia’s reliance on the mining sector has grown even greater. Today’s ABS State Accounts show that mining now comprises 47% of the WA economy. This is a new record high, increasing WA’s extraordinary reliance on this one industry for our prosperity.

No other State relies on one sector so much. Nationally, the next highest share of a state economy by one industry is the health and community services sector in Tasmania, at 12%.  After mining, WA’s next-biggest sector is construction, making up 5% of our economy in 2020-21.

These results reinforce the calls from CCIWA for a host of economic reforms to drive the diversification of the WA economy. Importantly, diversification can occur alongside a strengthened mining sector.

Western Australia’s economy grew by 2.6% in 2020-21. No other public economic forecasts were as close to this number as CCIWA’s Outlook estimate (2.9%). WA grew more strongly than large states like New South Wales and Victoria, but slower than South Australia, Tasmania and the ACT.

WA also benefited from growth in the agriculture, manufacturing and health care sectors.

After weakness over eight of the past nine years, non-mining investment surged to 8%, fueled by Federal Government business incentives.

However, the challenge is clearly there for WA to achieve broad based growth across its economy. CCIWA continues to advocate for policies to drive diversification, including a strengthened approach to attracting international investment, as well as much-needed investments in digital government. Also vital is addressing the fact that many WA businesses face the highest payroll tax in the country. This cannot continue if we are to attract the investment needed to diversify our economy.

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