You can feel it, can’t you? There appears to be a collective sigh from West Australians who, perhaps prematurely, are starting to get the vibe that their State — and their nation — may have dodged a bullet in terms of what COVID-19 has done to countries like Italy, Spain, China, the US and the UK, where thousands upon thousands have died.
Premier Mark McGowan last Sunday ever so slightly opened the door to some COVID-19 restrictions being lifted in WA as early as next month.
And Prime Minister Scott Morrison has followed this theme this week — albeit with the disclaimer, #notoveryet.
Very quickly, the discussion has turned from saving lives, to saving the economy.
So, what is the Premier’s plan for economic recovery in WA? They say that to understand the future, one must often look at the past. And if history is anything to go by, Mr McGowan’s road-to-recovery plan will heavily feature his Government’s signature policy — Metronet.
Transport Minister Rita Saffioti just recently already let it be known that Metronet — a new rail network for Perth — was a key component of WA’s economic comeback. “Our massive pipeline of major roads and Metronet projects is allowing work to continue through this crisis, and will also be part of a wider economic recovery plan for the State,” Ms Saffioti said. “I believe Metronet will play a big part of Western Australia’s COVID-19 economic recovery.”
And just last month, Premier McGowan told The Sunday Times he had held discussions with Mr Morrison over a $700 million Commonwealth contribution towards a $900 million roads program to improve 17,400km of country roads in the name of creating jobs in this COVID-19 environment.
So, what we know already, is that rail and road construction will feature in the McGowan Government’s economic recovery blueprint. But will the construction of a multibillion-dollar rail system for Perth and its outer suburbs and new roadworks be enough to drag WA out of the expected post COVID-19 economic doldrums?
COVID-19 stimulus measures announced by the McGowan Government since March equate to a $1.7 billion cost.
But you have to remember, that before COVID-19, WA Treasury forecast a $2.6 billion surplus for 2019-20, and $2 billion plus surpluses for several years thereafter.
Surprisingly, iron ore prices have held up despite the COVID-19 crisis, and a new 70¢ GST floor for WA put in place by the Morrison Government in 2018, means WA’s budget should still be in relatively good shape despite COVID-19 measures announced in March.
This is despite the fact that, as Treasurer Ben Wyatt pointed out this week, revenue streams like payroll tax and stamp duty will be affected. And WA’s GST take, despite the floor, will be reduced.
“The coronavirus will be the most significant economic challenge for Western Australia since the Great Depression,” Wyatt warned this week.
WA already had its challenges pre this coronavirus crisis. For example, at the beginning of January this year, unemployment was at 5.8 per cent.
The number of WA households battling to pay their mortgages had risen sharply.
Just last month, the Chamber of Commerce and Industry WA put out a media statement titled “Turbulent waters for ship of State”.
The CCI said that while the national economy grew 0.5 per cent in the December quarter, the WA domestic economy had contracted 0.2 per cent, “putting WA among the weakest performing States”.
And a CCI Consumer Confidence Survey showed that even before the coronavirus started to hit WA in March, West Australians were loathe to part with their money.
McGowan and Wyatt now have a new set of problems to deal with. But both McGowan and Wyatt will not want the Budget to go back into deficit.
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