- 2023-24 State Budget shows Western Australia’s economy remains strong despite global economic headwinds
- WA’s economy is expected to grow by 4.25 per cent in 2022-23, the highest growth in nine years, underpinned by strong exports
- WA’s goods exports at record levels, accounting for almost half of national total
- A record 1.53 million Western Australians in work, led by strong growth in full-time employment, particularly for women
- Budget delivers cost of living support to WA households and businesses in response to global inflationary pressures and national interest rate increases
The McGowan Government has today released the 2023-24 Budget, which shows Western Australia’s economy is expected to grow by 4.25 per cent in 2022-23, the strongest growth in nine years – bolstered by strong export growth.
Goods exports reached a record $272 billion in the year to March 2023, accounting for 45 per cent of the national total.
Strong economic activity has seen WA employment climb to a historic high of 1.53 million people in March 2023, with record full-time employment. Of note, full-time employment for women has grown by more than 10 per cent over the 12 months to March.
The McGowan Government pledged to add 125,000 jobs by 2025 26 in the lead up to the 2021 election. Already 121,632 jobs have been added, or 97 per cent of the target. Since coming to office in 2017, 218,621 jobs have now been created.
Reflecting the strong demand for labour, the unemployment rate has averaged just 3.4 per cent over the 12 months to March 2023, the lowest level since 2009. Strong labour market conditions have seen wages growing at their fastest rate in a decade, with a forecasted growth of three to four per cent over the forward estimates.
Global inflationary pressures and record increases to interest rates set by the Reserve Bank are resulting in rising cost of living pressures for Western Australian households.
The latest data shows the Consumer Price Index (CPI) appears to have peaked in the December quarter 2022. Perth’s CPI eased to 5.8 per cent in the recent March quarter, the lowest of the Australian States and below the national rate of 7 per cent. The lower inflation rate for Perth compared to the national rate is underpinned by double-digit electricity price increases on the east coast, which are as high as 25.7 per cent in Sydney.
The McGowan Government has responded to the cost of living pressures with a $715 million package to support households and small businesses across the State in the 2023-24 Budget.
This includes a minimum $400 electricity credit for all WA households, with targeted relief of $826 for those households most in need. Furthermore, increases in household fees and charges will be kept to 2.4 per cent in 2023-24, well below the projected level of inflation.
In addition, the Hardship Utility Grants Scheme will be increased by 10 per cent to further help eligible households requiring assistance with their utility bills. The increase means eligible households receive up to $640 in support (or $1,060 for those households above the 26th parallel). The Seniors Cost of Living Rebate will increase in line with inflation at a cost of $16 million.
Inflationary pressures and higher interest rates are expected to moderate economic growth in 2023-24, including discretionary spending by households. The domestic economy is expected to grow by 3 per cent, while Gross State Product (including net exports) is forecasted to grow by 2.25 per cent as export volumes level off and spending on overseas holidays continues to normalise.
The strong Budget position has resulted in a record $39 billion investment in infrastructure towards major hospital expansions, the new Women and Babies Hospital, the transformational METRONET program, regional road projects and decarbonisation projects. These projects will all support economic growth and job creation over the next four years.
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As stated by Premier and Treasurer Mark McGowan:
“Conditions in the WA economy are strong and are forecasted to remain resilient even as we face the challenges of rising interest rates and global economic volatility.
“Treasury is forecasting growth in the State’s economy at 4.25 per cent in 2022-23 – Western Australia’s best result in nine years.
“We know many WA families are doing it tough, and that’s why my Government is using our strong financial position to deliver cost of living relief to every WA household and small businesses in the State.
“WA’s economic and financial performance continues to benefit the entire nation, with billions of dollars flowing to the east coast propping up the nation.”
