Yesterday, the Western Australian Premier and Treasurer, The Hon. Mark McGowan, delivered his fifth state budget – first as Treasurer – spending big on infrastructure, health, education, and police.
After a whopping surplus of $5.6 billion in 2020-21, the budget estimates a $2.8b surplus for 2022, and is expected to increase moderately across the remainder of the forecast period. This is largely due to nearly $28b in expected revenue from iron ore royalties, with the price of iron ore forecasted to return to its average of US$66 per tonne. The exports from Western Australia grew to $223b in 2021, accounting for more than half of the nation’s exports.
Net debt is expected to fall for a third consecutive year to $32b in 2021-22, before increasing again to $36b in 2025 – $4.2b less than expected in the Pre-election Financial Projections Statement.
Western Australia is the only state to record growth in its domestic economy, growing 5.7% since the start of the pandemic, with growth to remain moderate throughout the forward estimates. Employment is expected to increase in 2021-22, with the unemployment rate sitting at 4.75% in 2021, and is expected to remain steady at 4.5% throughout the next four years.
Key highlights:
Infrastructure
- $11.7b for road projects and road upgrades
- $5.7b over the next four years for ongoing METRONET projects
- $4.5b for transport initiatives in regional Western Australia
- $1.4b to build a new desalination plant
- $500m for major upgrades and projects at Western Australia’s ports
Health
- $1.8b to build the new Women and Babies Hospital
- $1.3b towards improving health infrastructure, major hospital redevelopments and expansions which are underway
- $495m boost to the Mental Health Commission for mental health investments
Safe communities
- $1.78b for the WA police force
- An additional $875m for social housing, including $750m to establish a Social Housing Investment Fund, taking the total investment to $2.1b
Education and training
- $6b for schools, including $449m to build new and improved school infrastructure
- $121.4m for TAFE and training initiatives
- $87.6m to upgrade Science, Technology, Engineering and Mathematics facilities in schools
- $32.4m to create 300 new jobs for apprentices and trainees with Group Training Schemes
Climate and renewable energy
- $750m Climate Action Fund to deliver initiatives designed to address the threat of climate change and help industry to create sustainable jobs
- $206m for renewable energy initiatives to fuel WA’s future, including standalone power stations, clean energy in schools, wind turbine manufacturing, refurbishment of Denham Power Station and $1 million for research into the viability of a local green steel industry
- $61.5m to stimulate local demand for renewable hydrogen in transport and industrial settings
Revenue Measures
Off-the-Plan Transfer Duty Rebate
The existing off-the-plan transfer duty rebate will be extended at a reduced rate of 50% (currently 75%), with a continued maximum rebate of $50,000. The rebate is available to owner-occupiers and investors who enter into a pre-construction contract between 24 October 2021 and 24 October 2023 to purchase a new residential unit or apartment in a multi-tiered strata scheme.
Land Tax Disaster Relief
There is currently an exemption available for a principal place of residence under construction affected by the Wooroloo bushfire or Cyclone Seroja. However, a landowner must have entered into a construction contract by 30 June 2021 to be eligible.
The eligible properties affected by the Wooroloo bushfire or Cyclone Seroja will continue to be exempt from land tax in 2021-22 and 2022-23 to ensure that landowners maintain the exempt status even if they were unable to enter into a building contract by 30 June 2021.
