Full dance card for Treasurer trying to stimulate WA economy
Economic Reform Statements can have a habit of slipping under the waves quite quickly, or not being promoted at all, despite their noble intent and the significant amount of thought and work that goes into positioning them.
However, the statement tabled by Western Australian Treasurer and Minister for Finance, Ben Wyatt last week has an extra layer of intent attached to it for two reasons.
Firstly, by the time Western Australians get back into the full swing of things in 2020 after the Christmas and New Year period, we will start the 12-month countdown to the next State election.
Secondly, the Treasurer has recently been candid in a number of forums around the level of difficulty the government has faced in achieving significant traction on creating new jobs for Western Australians, while also attempting to diversify the State’s economy and revenue base.
The key themes emerging from the Treasurer’s updated Economic Reform Statement indeed reflect the continued drive by the McGowan Government to create jobs for Western Australians in diverse areas of the economy. However, the statement also goes a long way to acknowledging the State’s traditional strengths in mining, agriculture, tourism and international education.
Significant tranches of the policy reform under way deal with strengthening these traditional sectors through investment in technology and innovation to not only drive the future growth of these industries, but also provide an opportunity to export the application of developed IP in the region – a key pillar of the State’s Asian Engagement Strategy.
The mining and petroleum sector in the State, which provides the government with the most potential upside, equally presents the most significant risk to revenue, pending commodity markets. The resources sector, at least on the surface, appears to have matured, with steady production and new major projects being brought on in an orderly manner in the near-to-mid-term.
This growth has given the McGowan Government the confidence to march-on with its ambitious infrastructure investment plans, getting back to the fundamentals that Western Australia governments of both colours have historically done well – namely counter-cyclical investment in metropolitan and regional transport upgrades and extensions as well as public infrastructure to absorb mass-employment shedding post the resources construction booms we have experienced over the decades.
The centrepiece of course is the METRONET plan the Premier took to the last election, which is now being rolled-out across myriad fronts, with six METRONET projects officially under construction in 2020. There is also a record $2 billion flagged in FY2020 for building, upgrading and maintaining regional roads networks.
Just to illustrate the fine balance of the resources sector currently, the Minister for Mines and Petroleum Bill Johnston has expressed his public frustration at the massive Browse gas project still sitting on the shelf despite the original consortium starting to get people genuinely excited about it as far back as 2012. On the flip-side, Mr Johnston is likely very pleased the current investment environment is sound enough to have sparked a recent surge in hard rock resources exploration in the State for gold, lithium, copper and nickel deposits in particular.
In-line with this, the Economic Reform Statement reiterates its first strategic lever as being “delivering a supportive business environment”, as outlined in the Diversify WA economic development framework.
This includes the creation of Infrastructure WA, tasked with the development of a 20-year State Infrastructure Strategy to efficiently maintain our future population needs and global industrial competitiveness. In terms of regulatory relief, the government is following through on its proposal to streamline environmental approvals for mining projects currently subjected to separate, but overlapping, State and Federal processes.
Other centrepiece initiatives focused on future-proofing the State’s revenue base and future energy needs include the $6 million co-investment in the Future Battery Industries Co-operative Research Centre to build IP around downstream processing of battery chemicals and potential local manufacturing of battery cells. Separately, the government has also hedged its bets through the creation of a $10 million Renewable Hydrogen Fund to provide grants to proponents doing early work to establish the industry in Western Australia.
The creation of an Industrial Land Authority has been central to assisting these and other new industries in taking a foothold in the State through the leasing of around 100 hectares of strategic industrial land which, according to the Treasurer, has paved the way for more than $2.5 billion worth of private investment.
The government has not forgotten about the agricultural sector in this update either, particularly given parts of the State have been suffering similar drought conditions to those being endured by our east coast cousins. There is the establishment of the Northam Grains Research Facility as well as the continuation of a partnership with the Grains Research and Development Corporation, with new projects focused on soil productivity, agronomy, genetics and crop protection.
On the livestock front, the Department of Primary Industries and Regional Development is co-ordinating the construction of a $1.3 million sheep research facility at Katanning, while remaining committed to the $18.6 million Wild Dog Action Plan to support the re-build of flock numbers in areas, where farmers have abandoned sheep for more resilient cattle in the face of worsening wild dog attacks due to burgeoning numbers of the animals.
Michael Cairnduff is a Director in Cannings Purple’s market-leading, bipartisan Government Relations team and an expert in the resources sector and in helping clients navigate channels of government at all levels. Contact Michael.
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