WA Treasurer Likens Mid-Pandemic Crisis to the Post-WW II Economic Situation
McGowan government unveiled on Thursday a comprehensive assistance plan to the recovery of the state economy from the pandemic losses.
WA Labor government, mostly thanks to its reasonable planning and forecasting, secured a budget surplus of $1.2 billion this financial year, despite the economic impacts of the pandemic. The iron ore royalties also played a role.
Western Australia Treasurer Ben Wyatt remarked that the recovery from the dire economic situation could not take place without cooperation. He also emphasised that the Western living standards are closely connected to a world of commerce and social exchange that the pandemic disrupted to extent comparable with World War II.
After the war, the creation of new international institutions, including Bretton Woods, World Bank, International Monetary Fund, and the United Nations, provided a framework for peace and economic prosperity. The removal of barriers in international trade within the West helped to rebuild the economies. People learned from the fallout of World War I that the ‘beggar thy neighbour’ policies made another global war inevitable, reminded Mr. Wyatt.
Minister observed close similarities between the post-World War II crisis and the shock to the economies due to the pandemic. He emphasised, the scale of the Government intervention has been unseen in our lifetime. We must keep a keen eye on the fact that increasing living standards and opportunities are no less guaranteed than they were when the Second World War came to an end, he stressed.
This historic lesson motivated the authors of the 2021 budget for Western Australia.
As a result of our sensible and strong financial management, we've been able to fully fund our $5.5 billion WA Recovery Plan in this Budget, stated Premier Mark McGowan.
From its first pages, it radically contrasts with the Federal Budget presented yesterday by Mr. Josh Frydenberg. Western Australian government decided to include the less fortunate and poor of the poor, unlike the Morrison cabinet. It is not an ideological difference but rather a sign of humanity that the Liberal government has continually failed to demonstrate in its economic strategy geared for its iron electoral base that is a small but super-wealthy sector of Australian society.
Radically different philosophy of budget architecture than utilised by Federal Government
Mr. Wyatt of the Labor Government applied different philosophy than a Federal Coalition designing the next year's budget. WA Treasurer helped but not prioritised the business, and he invested in infrastructure and schools but did not forget about the support for households and the most vulnerable.
The government investment package is targeting equally regional and metropolitan WA, focusing on tourism and WA food production in the latter and METRONET in the former, reinforcing schools, industrial, and health sectors for both.
The McGowan Government has committed $319 million towards social housing, that provides homes to hundreds of vulnerable Western Australian families and creates new jobs.
Equally significant is $556 million of support for households, which covers freezing household charges, passing on lower gross rental value-related charges, and a one-off doubling of the Energy Assistance Payment to vulnerable households. According to the estimations, this decision has saved Western Australian households an average of $663.52 on their household basket of fees for 2020-21.
These gestures of care and interest in little people are distinguishing the Labor approach to the recovery from the tried and failed Liberal strategies.
But the majority of spending, worth $7.5 billion over the next four years, will focus on the investment program. The center of it for Perth is METRONET, with four major projects, including Morley-Ellenbrook Rail Line, Yanchep Rail-Extension, and the Midland Station Redevelopment. The government also committed to helping to build a new production plant of trains in WA that will create hundreds of new jobs.
The road-safety projects that include Mitchell Freeway Extension will receive more than $900 million.
What is important, the majority of investment must be managed under the Buy-Local policy which will decrease cheap imports uplifting local economies.
Unlike the architects of Liberal Federal budget that focusing on the construction and heavy-industry jobs ignoring the work-places for women, the WA government committed more than $487 million to reinforce the system’s capability and capacity to support the community’s physical and mental health. Out of this amount, $56 million will fund mental health services.
Liberal opposition challenged McGowan government claiming that the budget does not support the businesses.
The Federal Govt has supported WA and the State Govt through stimulus packages of $10b and an additional $1b in infrastructure, stated Ms Alyssa Hayden who is Liberal Shadow Minister for Small Business and Tourism. So after this $11b lifeline to West Aussies, Premier McGowan still won’t put his hand in his pocket and support business, she complained.
But her complaint may not be fully justified since WA budget includes massive investment projects in which business will take part. The money has been also appropriated for more immediate needs for businesses.
A generous $943 million support is also available to local businesses, including the $2,500 small business electricity tariff offset; $17,500 grants and a four-month waiver of payroll tax for small and medium-sized payroll tax-paying businesses; and the waiver of a wide range of business licence fees.
In addition to that, business will receive subsidy from Federal Government if Mr Frydenberg will keep his word.
The equitable stimulus for households and businesses can pave the way for renewed economic prosperity.
Although the budget will generate a significant debt for the state, WA can be confident of one of the main sources of its revenue will not dry up soon.
The WA mines are filling for the Brasil supply disruptions of iron ore due to the pandemic for Communist China. Some economists predicted that this trend in high price and limited global supply would benefit Australian in the next two to four years.
If the projects planned in the budget will be launched, and the amount of the stimulus will help equally households and businesses to offset the consequences of the pandemic economic crisis, the government may preside over a long and equitable period of economic boom and prosperity in this part of the country.