Western Australia bucks global trend in economic growth

23/12/01
Western Australia is on track to record strong economic growth this year, despite a global downturn.
Treasurer Eric Ripper said Treasury's Mid-Year Review released today forecast that Western Australia's economy would grow by three per cent this year, compared with last year's growth rate of negative 1.2 per cent.
Mr Ripper said that while the growth rate had been revised down by one per cent, this was still an excellent indicator of the strongest State economy in the country.
The Mid Year review also revealed that the State Budget was on track to end the year in surplus, despite a massive downturn in oil royalties and Water Corporation dividends caused by water restrictions and the need to inject an additional $70million into the health system.
Mr Ripper said the Government had taken the tough decision to defer spending programs, rather than allow the Budget to slip into deficit.
"It's critical that the State Government maintains financial discipline, even in the face of an uncertain international outlook and cost and demand pressures in services like health," he said.
"Slipping into deficit is not an option. The Government remains committed to a surplus and through an adjustment of its priorities aims to deliver a $9.5million surplus this financial year, down from a forecast of $51million in the September Budget.
"While the surplus is slim by some measures, maintaining it at a time when oil royalties are collapsing demonstrates the Government's commitment to financial discipline. We do not want to repeat the performance of the Court Government which delivered four deficits in a row during a period of record revenue growth.
"The fact that the State Budget can remain in surplus and ride out these external shocks is a direct result of the tight financial controls, massive savings drive and focus on key community priorities in the Government's first 10 months in office."
Mr Ripper said the State was showing strong signs of recovery.
"An increase in business and mining investment, improvements in employment figures and a rebounding housing sector are positive signs for the State's economy," he said.
In the last few weeks, the Government had announced a series of economic opportunities, including:

• the $1billion Methanex gas to liquids project in the Pilbara;
• the proposed $1.5billion Hismelt project in Kwinana;
• an agreement for the Austeel iron ore processing project in the Pilbara;
• the $300million Tenix ship building contract with the Philippines Government;
• in principle support for the Pinnacle Blue super computer project; and
• further work on the massive Jervoise Bay marine engineering and fabrication complex.

Mr Ripper said the Government was also pursuing reform of the electricity market to deliver more competitive energy prices to industry and consumers, and was working to streamline native title process to ensure timely access to land for mining and exploration.
Minister's office: 9222 8788