In his second budget as Premier and Treasurer since the big election win last year, Mark McGowan announced a $1.3 billion package to “help strengthen and diversify” the local economy.
The 2022-23 Budget was originally set to have a $2.4 billion surplus, but with the continuing mining boom and improved GST position, it has been revised up to $5.7 billion (almost identical to last year’s surplus of $5.8B), making WA one of the few jurisdictions in the world (and only one in Australia) to be running a budget surplus.
Net debt is also below $30 billion for the first time since 2015.
There weren’t too many major surprises – a $3,500 rebate for those purchasing electric cars under $70,000 had been announced a few days ago, for example. Rumours had also been circulating for several weeks that all households would receive (another) credit on their electricity bills – this time it is $400. Last year there was a $600 bonus.
It is no secret the state government is keen to diversify the local economy – something we in the startup community have been talking about for year – which is why it has allocated over $1.3 billion targetted to achieve this.
However, not every single dollar of the $1.3 billion program will be spent directly on this per se.
So, what’s in the budget?
There will be an $80 million boost to the existing Investment Attraction Fund, which is designed to facilitate industry-led diversification proposals that create local jobs in new and emerging industries. This fund can hand out $5M grants to businesses that have a trading history of at least three years (so that knocks out a lot of startups). The first $100M IAF opened this year.
The Industrial Land Development Fund will be increased by $50 million to $100 million to unlock private sector investment and spark new growth opportunities.
$25 million will go towards the Western Australian Agricultural Collaboration, in partnership with CSIRO and the university sector to leverage funding from the Federal government and wider industry.
$8.7 million will be helped to implement the WA Health and Medical life Sciences Industry Strategy, $11 million to continue grant programs that support the space sector and $12 million for the WA-Array program.
$17.1 million will be spent to expand WA’s international trade offices – which include a global ‘invest and trade’ marketing campaign.
$4.5 million will also be spent to “strengthen the local capability of our small and medium-sized enterprises to compete for State Government work.”
Other funds will also go towards encouraging business call centres and back-office processing back to the state and to the Mineral Research Institute of WA.
A $69.5 million boost to the tourism sector will also be utilised to attract blockbuster business events to the state. Another $41.2 million will also be given to the international education sector. These last two sectors were smashed the most during Covid.
The rest of the $1.3 billion goes to infrastructure projects the government says will “expand existing industries and facilitate new industries” such as a $322 million to upgrade the Geraldton Port.
Nonetheless, investments in emerging industries are certainly welcomed.
“Delivering another strong surplus means my Government can deliver on the key focus of diversifying our economy across a wide range of industries,” said Mr McGowan.
We are ensuring that diversification plays to our strengths, but also reduces any over-reliance on one particular sector to ensure our economy remains strong into the future and generates long-term growth as we reconnect with the world.
Mark McGowan
