WA’s resources sector driving Australia’s economic growth

When the Commonwealth Grants Commission last week released its annual report on GST revenue sharing it reignited a war on words among the eastern states regarding Western Australia’ allocation.

New South Wales Treasurer Daniel Mookhey lashed the system that carves up GST revenue and is calling for it to be reformed after NSW had its allocation slashed and WA is being topped up with $838 million more.

The Commonwealth Grants Commission released a breakdown of the latest GST carve-up, revealing Western Australia will receive $7.257 billion in 2024-25.

Victoria will receive an extra $3.686 billion, taking its GST allocation to $22.227 billion. New South Wales is getting $310 million less, however the state has the largest GST allocation with $24.224 billion.

Queensland also has $469 million slashed but the state will still receive $17.460 billion in GST in 2024-25. The Australian Capital Territory will continue to have the least allocated at $1.889 billion.

As the GST debate rages, a report commissioned and released today (18 March 2023) by the Chamber of Minerals and Energy of WA shows a record $132 billion in direct spending by Western Australia’s resources sector in the country, up 32% from the previous year.

CME’s latest annual Economic Contribution Factsheets show direct economic contribution in WA has surpassed $77 billion – or the equivalent of almost $27,000 per West Aussie – a more than 30% increase on last year’s survey. 

Western Australia’s resources sector alone accounted for 9% of the nation’s GDP including both direct economic contribution of $131 billion and the indirect economic contribution of $101 billion.

The results show 15,508 individual local businesses, 1,312 community organisations, and over 50% of WA’s 137 local governments directly benefited from spending by the industry in 2023.

CME Senior Economist Aaron Walker says the sector’s economic contribution to the state accounted for about half of WA’s economic activity and capital expenditure – and close to 90% of the state’s goods exports.

“These figures highlight the sector’s current contribution to Western Australia and its regions and reinforce the role of the resources industry in WA’s future.

The findings demonstrate that all West Australians benefit from the industry’s activity, and I think that’s an important output of this survey. There’s a ripple effect of benefits that become increasingly valuable at a time when the cost of living is on the rise.

The modelling also indicates the WA resources sector supports 3 in 10 jobs across our state and accounts for 9% of the nation’s GDP.” 

CME Chief Executive Rebecca Tomkinson says it’s important to note the data confirms the contributions of the resources sector at a time of substantial federal reform.

She says there would be major ramifications for the resources sector – and by default Western Australia and national economies – if reforms weren’t managed effectively and industry not consulted appropriately.

“If the federal government gets it wrong, it risks not only the ongoing economic contribution of the sector’s existing operations, but also $93 billion in future investment projects and associated jobs.”

The CME member survey included 49 companies, directly employing 98,482 full-time Australians, and contributing $132 billion to the nation’s economy. A total of $33 billion in corporate taxes was paid by those surveyed, representing 20% of Australia’s corporate taxes.

Since CME first started collecting this data point in its surveys in 2014-15, contribution via corporate taxes from the WA resources sector has tripled.

Write to Adam Orlando at Mining.com.au

Images: CME
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Written By Adam Orlando
Mining.com.au Editor-in-Chief Adam Orlando has more than 20 years’ experience in the media having held senior roles at various publications, including as Asia-Pacific Sector Head (Mining) at global newswire Acuris (formerly Mergermarket). Orlando has worked in newsrooms around the world including Hong Kong, Singapore, London, and Sydney.