WA Budget responsibly targets urgent services while need for reform grows

The Western Australian government has used the commodity windfall to deliver a budget that balances cost-of-living pressures with modest investments in critical services.

This is a responsible budget that does not stoke inflation, instead paying down $1.2 billion in debt and retaining fiscal reserves in a volatile and uncertain economy, says the Committee for Economic Development of Australia (CEDA).

“The $252 million health spend to improve emergency care and transition older patients out of hospital is a good step towards addressing the significant needs of our health system,” says CEDA Senior Economist Cassandra Winzar.

“An additional investment into the Mental Health Commission of $181 million for new and expanded mental health, alcohol and drug services also provides critical support for those in need.

“However, the WA health system will need continued investment to match population growth and increasing demand for services.

“It is this increased investment in critical services that will set Western Australians up for future prosperity.”

CEDA continues to advocate for further long-term policy and planning through investments in social and affordable housing.

Cost of living

“Cost of living concerns continue to mount for Western Australians,” says Ms Winzar.

“The announcement of $400 per household to offset electricity bills is a modest measure that will go some way to alleviate these cost pressures.

“However, the government can also improve the accessibility of critical services by further investing in the digitisation of government services.

“We welcome the announcement of an additional $400 million to the Digital Capability Fund that was introduced in last year’s Budget.

“WA is still behind other states in this space and improving the accessibility of services will benefit the community.”

Diversification

“WA continues to rely on the mining industry to drive growth and government revenue,” says Ms Winzar.

“There are important windows of opportunity WA needs to leverage, including those related to new and emerging technologies and through enabling investment and innovation in support of decarbonisation and sustainability.

“The announcement of $1.3 billion in initiatives, the bulk of these on port and road infrastructure, to diversify the economy will assist WA to move beyond mining.

“However, diversification of both industries and export markets is key.

“Trade agreements and diplomatic relationships are important to opening new markets and must be a continued focus for this government.

“The WA government also needs to focus on providing additional foundational support for new industries such as hydrogen, space and medical technologies to grow and scale up in this state.”

Skills and workforce participation

“Like the rest of the nation, WA is suffering from acute skills shortages,” says Ms Winzar.

“With a low unemployment rate and high workforce participation there is limited capacity in the labour market.

“The Budget does not address how the government plans to attract staff – particularly to the health and care sectors, which have chronic skill shortages.

“It also fails to include enough measures to attract workers from both interstate and overseas to WA to address shorter term workforce challenges.

“The announcement of an additional $38 million to continue the lower fees initiative for TAFE is a step forward in addressing some of the skill shortages faced by employers.

“However, temporary subsidies will not be enough to address the extent of the labour shortage evident in WA. We need programs that ensure a sustainable supply of labour in the long term.”

Housing

“The cost of housing continues to rise in WA, both the price of new builds and rents,” Ms Winzar.

“The WA government’s continued focus on housing, with measures to incentivise Build to Rent and higher density dwellings, are a strong positive in the Budget, following last year’s Budget’s record social housing spend.

“Constraints in labour and resources have resulted in slow progress on social housing projects, and we would have liked to see more interim measures such as increased spending on modular dwellings to address housing shortages in the short term.

“However, this Budget misses the opportunity for stamp duty reform. Replacing this inefficient tax with a land tax would provide some assistance on housing affordability and provide a more stable government revenue stream.”