West Australians are calling on the McGowan Government to rein in their unsustainable spending in today’s Mid-Year Economic Review.
Recent polling by the Chamber of Commerce and Industry WA (CCI) has revealed that 58 per cent of West Australians believe the Government should cut their own expenditure to boost economic recovery, instead of increasing taxes on businesses or households.
CCI Chief Economist Rick Newnham said every WA business and household has had to rein in spending to balance their budgets during tough economic conditions and the Government should be no exception.
“Government spending is now at a record high $24 billion – 10 per cent higher than at the peak of the mining resources boom, compared to GSP, in 2012-13,” Mr Newnham said.
“It is also higher now per person than any other state at $11,484, compared to Victoria ($9,978 per person) and New South Wales ($9,758 per person).
“It is clear that the Government doesn’t have a revenue problem, they have a spending problem, and the only door they should be knocking on to fix it is their own.”
CCI has welcomed a boost to WA’s domestic economy in the September quarter, up 0.9 per cent – the highest quarterly growth since June 2015 – and a rebound in business and consumer confidence – both the highest they have been in almost three years.
“It is critical that the Government continues to foster this growth by supporting business investment, which puts extra wages in the pockets of workers, supports families and creates prosperity for the community,” Mr Newnham said.
“For business investment to grow, WA businesses must feel confident that the investment climate will improve in the future.
“West Australians will already be faced with job losses of between 1,334 and 5,297 when the Government’s payroll tax rate increase is introduced on 1 July 2018. The economy cannot afford to take another hit from new taxes just as it is starting to get back on its feet.
“The Government must recognise that economic activity will only strengthen if both consumer and business confidence is fostered. Threats of increased taxes, such as a bank tax, which will flow directly through to customers, will only do the opposite.”
CCI congratulates the McGowan Government for standing strong on its wages policy during WA Police’s Industrial Agreement negotiations.
“Public sector wages are the single biggest area of government expenditure (45%), so it is vital that the Government is able to get wage growth under control to repair the state’s finances,” Mr Newnham said.
“To give confidence to business and households, CCI urges the Government to create a stable investment regime in today’s Mid-Year Economic Review by continuing to reduce its own spending, not increasing taxes that will hurt economic recovery.”