Article by Stuart McKinnon courtesy of the West Australian.
Lobby groups celebrate iron-clad Budget result.
Resources lobby groups say the $5.6 billion surplus delivered in the State Government’s 2020/21 Budget highlights the huge contributions made by the industries they represent.
Iron ore royalties added $11.3b to the State’s bottom line last year and are expected to contribute another $9.2b this year.
Association of Mining and Exploration Companies chief executive Warren Pearce said the WA Budget had been ironclad by iron ore royalties and strong COVID management.
AMEC cheered the $120 million committed for an additional 150 staff to expedite mining and environmental permits as well as a $12.5m allocation for the Exploration Incentive Scheme.
Mr Pearce also welcomed the Government’s decision to slow work on its Metronet project and other infrastructure works to ease rising labour pressures across the WA economy.
However, he said in an economy that had only 4.6 per cent unemployment amid ongoing border restrictions, the State already had significant labour shortages.
“With a range of industries experiencing heady growth, the risk of the economy overheating continues to grow,” he said.
“There is a high demand for people, skills and materials in WA, which means that both government and industry projects will likely face delays and increased costs, and there is the further risk that inflationary effects may escape these industries, and add to cost of living pressures across the community.
“Finding a safe way to bring interstate and international workers into WA will be the most effective way to relieve these pressures.” The WA Chamber of Minerals and Energy said the WA resources sector had remained the economic cornerstone of the State and nation over the past 12 months while negotiating the dual challenges of the ongoing COVID pandemic and skills shortage.
CME policy and advocacy director Rob Carruthers said the $12.7b in royalties, North West Shelf grants and lease rentals generated by resources sector operations were the State’s biggest single revenue stream in 2020-21.
“Indeed, these contributions totalled more than 31 per cent of all WA Government revenue and increased 36 per cent on the previous financial year,” he said.
The peak body for the Australian oil and gas industry said the Budget underscored the role natural gas played in helping to fuel WA’s healthy economic position.
The WA director of the Australian Petroleum Production and Exploration Association, Claire Wilkinson, said WA natural gas delivered the reliable and affordable energy needed to power the essential mining sector, in addition to directly contributing hundreds of millions of dollars in revenue through tax payments, grants and royalties.
“The record operating surplus of $5.6b has been thanks to the massive increase in mining royalties, a sector largely fuelled by the oil and gas industry,” she said.
Ms Wilkinson said APPEA welcomed the $750m Climate Action Fund, which included support for some renewable energy technologies but encouraged the State Government to embrace all lower emission technologies to help decarbonise the economy.
She urged the Government to look beyond its “narrow focus” on green hydrogen if it wanted to facilitate a thriving hydrogen export industry as quickly as possible.
“The Government is clearly committed to developing green hydrogen production in the State, as shown by a number of Budget announcements, but we believe the quickest path to export success will be through blue hydrogen production,” she said.
“Given our strong track record in natural gas, WA has the potential to be a global leader in producing and exporting blue hydrogen, which in turn can reduce emissions and accelerate infrastructure development for renewable hydrogen.” Committee for the Economic Development of Australia senior economist Cassandra Winzar said the Government should use its war chest to develop a long-term plan to help diversify WA’s resource-reliant economy.
The WA Property Council and Urban Development Institute of Australia (WA) welcomed a two year extension of the stamp duty rebate for apartments sold off the plan, saying it would help with housing affordability and supply.
The 75 per cent rebate on transfer duty of up to $50,000 will fall to 50 per cent after October 23.
Property Council executive director Sandra Brewer said the Government’s $875m social housing package would also ensure there was an immediate and long-term increase in WA’s social housing stock.
CPA Australia external affairs manager Jane Rennie said labour shortages would act as an anchor on the WA economy until the State’s borders reopened.
“Iron ore royalties . . . have delivered rivers of gold into the State’s coffers but this may slow before too long,” she said.
EXPERTS REACT We have literally kept the local economy powering during COVID.
APPEA WA Director Claire Wilkinson With a range of industries experiencing heady growth, the risk of the economy overheating continues to grow.
AMEC CEO Warren Pearce There has been a commitment to growing jobs – this is good for the WA economy.
UnionsWA secretary Owen Whittle The Government has really backed the WA building and construction industry to . be a key driver in rebuilding the economy.
Master Builders WA’s John Gelavis Labour shortages will act as an anchor on the WA economy until the State’s borders reopen.
CPA Australia’s Jane Rennie We are disappointed there is not a direct focus in the Budget papers on the skills crisis in the short-term.
UDIA WA chief executive Tanya Steinbeck