The McGowan Labor Government has today released the 2021-22 Mid-year Review which shows the State economy performing strongly as Western Australia prepares to safely transition its border controls on February 5.
The WA economy has carried the nation throughout the COVID-19 pandemic, growing by $11.4 billion in the past two financial years, or around 40 per cent of the growth in the national economy.
Treasury anticipates WA's economic growth will accelerate to 3.5 per cent in 2021‑22, which would be the strongest growth in eight years.
Employment is forecast to increase by 3.75 per cent or around 51,500 additional jobs in 2021‑22, more than three times the average employment growth over the past decade, with the unemployment rate expected to remain very low over the next four years at just four per cent in 2024-25.
The McGowan Government has created 140,000 jobs since coming to office, with a record 1.44 million Western Australians employed.
The Australian Bureau of Statistics' latest labour force data for November, released today, confirmed WA has the lowest unemployment rate in the nation and the lowest since July 2012 at 3.8 per cent.
The net operating surplus has been revised down in 2021-22 to $2.4 billion from $2.8 billion at Budget, with stronger surpluses now expected over the forward estimates.
While the sharper than expected fall in the iron ore price has reduced royalty projections in 2021-22, this is more than offset by a $1.7 billion upward revision to taxation revenue over the forward estimates. Strong economic conditions, particularly in the housing and labour markets, are expected to generate higher transfer duty collections (up $1 billion) and payroll tax (up $622 million).
Net debt is expected to decline for the third consecutive year to $32.6 billion in 2021-22, more than $11 billion lower than projected under the previous Government.
The McGowan Government has used the State's strong economic and financial position to make significant investments in the Mid-year Review to keep our economy strong and continue to prepare for living with COVID-19.
The WA Government remains the only government in Australia in surplus.
Major spending initiatives include:
- an additional $1.28 billion in spending on health and mental health, increasing total investment (including the State Budget) to $3.2 billion, the biggest boost on record. The additional spend comprises of additional beds and staff to meet demand and increase capacity for when COVID-19 enters the WA community, additional pandemic response spending such as vaccinations and testing, and other initiatives including health ICT and infrastructure;
- an extra $1.18 billion on priority transport projects (jointly funded by the Commonwealth) including additional investments in the job-creating METRONET program (Midland Station, Victoria Park‑Canning Level Crossing Removal and Byford Rail Extension) and a number of other jointly funded projects currently under negotiation and pending announcement in early 2022;
- further investments to diversify the WA economy with $300 million (including pending Northern Australia Infrastructure Facility loans) to upgrade common‑user infrastructure to support the proposed $4.5 billion Perdaman urea project, which is expected to generate 2,500 jobs in construction and 200 ongoing operational jobs, once it achieves all environmental and heritage approvals and final investment decision;
- $117.5 million towards Hydrogen Hubs in the Pilbara ($70 million) and Mid-West ($47.5 million), subject to matching contributions from the Commonwealth;
- $185.7 million for the Reconnect WA package to attract tourists, international students and skilled workers as we transition our borders and safely re-engage with the world; and
- $80 million for COVID‑19 Test Isolation Payments for casual workers and other people without leave entitlements to self-isolate while awaiting COVID-19 test results.
In addition, the McGowan Government has announced a new wages policy for public sector employees, which was brought forward from 2023 given the State's stronger than expected economic and financial position despite the global COVID-19 pandemic.
The policy offers public sector employees an above CPI outcome for two years, with a projected cost of $1.2 billion over the forward estimates.
As stated by Premier and Treasurer Mark McGowan:
"Western Australia's economy has carried the nation through the COVID-19 pandemic, given our efforts to keep the State safe, open and operating.
"Our finances remain the strongest in the country, with operating surpluses in each year of the forward estimates and the lowest debt trajectory of all jurisdictions.
"The Mid‑year Review uses our financial capacity to make further investments as we prepare to transition border restrictions when we reach our 90 per cent vaccination rate in early 2022.
"These investments ensure that we are in the best possible position to have a soft landing as we begin living with COVID-19 in the community, to reconnect successfully with the world, and to continue to diversify and strengthen our economy.
"We have sought to ensure that our transition to living with COVID-19 is as smooth as possible with very high levels of vaccination to keep us safe and our economy firing on all cylinders."
Premier's office - 6552 5000
