One of Australia’s leading economic think tanks has labelled WA Premier Mark McGowan’s first budget as Treasurer as safe but lacking in long-term vision.
- CEDA says the budget lacks a “long-term vision” for infrastructure
- The AMA is also warning about funding to operate the health system
- But public sector workers are welcoming an upcoming pay review
Mr McGowan delivered a $5.6 billion budget surplus, to make WA’s economy the best performing in the nation.
Budget supply was boosted by both GST revenue and high iron ore prices.
But the Committee for Economic Development of Australia (CEDA) said the government could have done more with that money.
“We’d really like to see a bit more around long-term vision, investment in social, community and economic infrastructure to set the state up for long-term economic growth and a vibrant society,” CEDA senior economist Cassandra Winzar said.
The Chamber of Commerce and Industry’s chief economist Aaron Morey said it was “extraordinary” the state was able to pay down debt, even after its spending.
“But what we see is that growth falls of a cliff next year,” he said.
“We needed to see more in this budget to drive the diversification of the economy.”
He also cautioned that net debt was forecast to climb at the end of forward estimates.
“That’s why it’s really important that the government be very fiscally prudent when it comes to policies like public sector wages,” he said.
Border doubt fuels skills shortage fears
With no date set in the budget for WA’s border to reopen, Ms Winzar said a shortage of workers would become an increasing problem.
“Skills shortages are really starting to bite, and not just in mining and construction, but in really critical industries such as health, aged care and disability services,” she said.
“It would have been great to see more incentives in terms of getting people into these industries over the longer term, and some short-term incentives to get people through the migration system and fill these critical jobs.”
Ms Winzar said border controls would continue to be an issue and businesses needed a pathway to bring key workers into WA, even with borders closed.
Chamber of Minerals and Energy policy director Rob Carruthers said the resources sector needed tens of thousands of workers over the years ahead.
“Whatever clarity that can be provided around borders, both state and international, that would really help with investing for the future and making sure we can take advantage of the very strong commodities cycle we have at the moment,” he said.
AMA slams ‘inadequate’ staff funding
The Australian Medical Association’s WA president, Mark Duncan-Smith, welcomed budget spending on hospitals, but said more money needed to be allocated for operating the health system.
He said the government forecast a $140 million increase in operational budget in 2021-22, but then a cut of $210 million in 2022-23.
Dr Duncan-Smith said it amounted to the government abandoning the WA health system.
“We’ve already seen that the operational budget levels of last year have been grossly inadequate,” he said.
“The current budget that we have been using has not been enough money to do business as usual.
“What we may see in the future … is great buildings and shiny buildings, but no one to be paid to work in them.”
He also called on the government to offer permanency to staff to improve the chances of doctors migrating to WA from overseas.
Opposition says regions missed out
The opposition was broadly critical of the government for not doing more with its $5.6 billion surplus.
Opposition leader Mia Davies said more funds should have been allocated to address the strain on the health system.
Ms Davies also criticised the government’s handling of the Royalties for Regions scheme.
“They’ve still got payments [from Royalties for Regions] going to the Water Corporation and other state government agencies for business-as-usual expenditure,” she said.
“They are short-changing regional communities — that program is supposed to be for regional development.”
Liberal leader David Honey lamented a lack of investment in renewable energy.
“We all know that the largest economic opportunity for the state in the future is the development of the renewable energy sector in the mid-west of Western Australia, and in this budget we saw essentially not a single extra dollar put in,” he said.
Public sector welcomes pay review, teachers unhappy
A key announcement in this year’s budget was a review of the government’s tough public sector wages policy, which had capped increases at $1,000 a year.
That was meant to last another year, but the Premier said a review would start next week, with a new policy expected by next year.
UnionsWA secretary Owen Whittle said the organisation would campaign through that review for better pay for public sector workers.
“For far too long, [increases in] wages for public sector workers have been below the increases to the cost of living,” he said.
“Public sector workers are the ones that have kept us safe during the pandemic.
“Their hard work means that WA is carrying the national economy and they deserve a pay rise.”
But Pat Byrne, the president of the State School Teachers’ Union of WA, was disappointed at the amount of funding allocated to schools.
She said increasing numbers of students — many of whom required extra care, like those with learning difficulties — was placing a strain on schools.
“If schools are to be able to cater for those students, they need to provide additional programs and have additional staff to do that,” she said.
“This budget will not allow that to happen.”
Ms Byrne said more needed to be done to improve access to regional housing for teachers, and to ensure there were enough staff to run in-demand TAFE courses.
Property Council praises stamp duty policy
The executive director of the Property Council in WA, Sandra Brewer, said the budget set the state up for a “safe and prosperous rebound” from COVID.
“What we need to do is ready ourselves to attract the best and brightest from around the world,” she said.
Ms Brewer said the government’s extension of a stamp duty rebate for off-the-plan apartments would contribute to securing a growing population.
“This 50 per cent rebate on stamp duty ensures housing affordability, and ongoing housing supply as people begin to move to Western Australia as we begin to reopen to the world,” she said.
Climate measures should go further: Conservation Council
The Conservation Council welcomed several initiatives for the environment, including a $750 million Climate Action Fund.
The fund includes $350 million for the expansion of the state’s softwood plantation estate.
But the Council’s Piers Verstegen said he believed the government should do more.
“We’re really pleaded to see the commitment to ending logging of native forests is being backed up by spending measures in the budget,” he said.
“Other states are spending a lot more on action on climate change and they’re reaping the benefits of that in terms of job creation, but also reducing their carbon pollution.
“Western Australia set targets to reduce emissions to net zero by 2050 and we really need to see significantly scaled-up investment and policy initiatives if we’re going to achieve those goals in WA.”