Speaking at the Western Australia launch of CEDA’s Economic and Political Overview, Mr Power said the proximity of China and Asia has brought the opportunity for WA to increase tourism, inbound investment and to leverage agriculture and energy businesses.
“We have a stable, responsive government and this is very important because we need long term investment horizons,” he said.
“It is only through economic activity that we can continue to develop the standard of living that we have particularly in our remote communities.
“Policies that support and encourage business investment…(can) generate jobs which mean that we have strong communities which will then contribute to a strong economy.”
Mr Power said that WA had significant advantages to drive the economy including an enviable lifestyle, natural resources and a diverse community.
“We’re a diverse community and we’re working as hard as we can to continue that diversity because it is through diversity of thought – background, experience, training – that we will be able to continue to innovate.”
Discussing the economic outlook for Australia was Commonwealth Bank Chief Economist and Managing Director, Economics, Michael Blythe.
Mr Blythe said there were four areas that are being closely watched to drive growth in the Australian economy.
“The massive mining capex boom has boosted our mining capital stock to levels we’ve never seen before and of course that capital stock is now generating production export for Australia with plenty more to come in terms of rising resource exports. It’s going to be a major driver of economic growth over the next couple of years,” he said.
Mr Blythe said that the above average rain falls across most of Australia in 2016 meant we would see a significant lift in agriculture production in 2017, while infrastructure spending and the income growth in Asia is also providing plenty of opportunities in parts of the Australian economy with tourism and education being standouts.
“Around about five per cent of the Chinese population have a passport. Now (if) the rest of the population got a passport you can only imagine the potential upside to the tourism story for Australia and in fact the rest of the world,” he said.
Australian Industry Group, Chief Executive, Innes Willox also discussed what he called the “China phenomenon.”
“There’s no doubt that the rapid industrialisation of China has moved and indeed continues to move the world,” he said.
“Never before has such a large country grown so rapidly.
“Industrialising and urbanising and in the process lifting hundreds of millions of people out of poverty to the point where many tens of millions are within sight of income levels similar to our own.
“This of course has been largely brought about by relocating labour from subsistence or near subsistence agriculture to the construction of huge cities and to the production of manufactured goods and increasingly services to the global market.”
Meanwhile, Chamber of Commerce and Industry of Western Australia, Chief Economist, Rick Newnham said that with the economy in transition, WA needs to start thinking differently about the WA economy and how State finances are managed.
“Infrastructure will need to be a key priority for any incoming government in WA,” he said.
“Coordinated long-term infrastructure plans…will reinvigorate the construction industry, whilst laying strong foundations for other sectors to grow.
“It’s only once this infrastructure is in place that market development and branding activities by the state will have the greatest impact.”
Mr Newnham said vast amounts of capital would be needed and these projects should be funded by public private partnership arrangements which would open new markets across the economy.
Mr Newnham also discussed the importance of having a balanced budget.
“WA will be $41 billion in debt by 2020, that’s almost the same amount of revenue that state government receives each year,” he said.
“Our debt to revenue ratio is the highest of all the states with deficits predicted for the next four years.
“Right now the government would have you believe that it has a tax problem, that we don’t have enough tax revenue.
“WA doesn’t have a taxing problem. WA has a spending problem.
“The increases in recurring spending has been a long-standing problem for WA governments.
“State revenue is quite variable and this is due to the boom and bust cycles in WA business investment as well as the variability of royalties which make up about 20 per cent of our state revenue.
“Even though we know this revenue is variable, WA governments continue to set their revenue expectations at the high points.”
Providing the political outlook for WA was ABC Political Reporter, Jessica Strutt and Business News Columnist and Political Commentator, Peter Kennedy.
With the upcoming WA election, Ms Strutt discussed observations from the campaign trail and the influence of the One Nation party.
“(Pauline Hanson) may not talk in intellectual academic terms; she doesn’t need to. Her appeal to voters is that she appears to come across as someone who is genuine and she certainly gives the impression that she listens, that she cares about the average person, the ‘battler’ – those sick of political correctness, and most importantly, those who are sick of the main political parties,” she said.
Ms Strutt discussed WA Labor’s campaign, with leader Mark McGowan running with the theme he is “an energetic, alternative to Colin Barnett” reminding voters that “he is in stark contrast to a tired old out of touch government.”
Mr Kennedy discussed the disconnect between the major parties and the issues voters care about such as job security and earning power.
“We heard that the economy is in transition – certainly it is in transition, there’s a period of uncertainty and (voters are) not quite confident that the major parties have the answers, that’s why they’re…looking around for alternatives,” he said.
“That’s why One Nation will probably poll so well but the other smaller parties will probably do quite well too.”