WA’s resources sector helps State’s economy recover from COVID-19
Western Australia’s strong mining and resources sector and its ability to safely continue to operate throughout the COVID-19 pandemic has led to a forecasted 1.25 per cent growth in the State’s economy in 2020-21, today’s State Budget reveals.
State Treasurer Ben Wyatt reaffirmed in his budget speech that the economic impact of COVID-19 would have been far greater if not for the continued operation of the sector, with the construction of new mines and strong export production helping to support both the local and national economies.
The Chamber of Minerals and Energy of Western Australia’s (CME) Chief Executive Paul Everingham said despite the significant impact of the pandemic, Western Australia was the only State to record positive growth in the domestic economy in 2019-20, with the Government acknowledging that investment and production in WA’s strong mining and resources sector was largely unaffected by the pandemic.
Mr Everingham said WA’s mining and resources sector continued to underpin the local economy, contributing more than $8.6 billion from royalties and North West Shelf grants, making it the State’s third biggest revenue stream behind taxation and Commonwealth grants.
“In handing down their respective budgets this week, the State and Federal Governments have both highlighted how the strong performance of WA’s mining and resources sector and the associated royalties that have flowed back into the economy, have provided a financial buffer against the devastating economic impact of COVID-19,” Mr Everingham said.
“Despite facing several logistical challenges, our mining and resources companies went to extraordinary efforts to continue operating safely during the pandemic and their commitment to overcome these hurdles has provided a financial lifeline to the nation.
“And the strong performance is expected to continue, with royalty income (excluding iron ore) expected to rise by $78 million, or 9.5 per cent, to $895 million in 2020-21, largely due to record gold prices.
“Iron ore royalty income, which is forecast to account for around 85 per cent of total royalty income over the next four years, is expected to return to its long-run average of $US64 per tonne after recent record highs, which represented a $1.7 billion increase or 25.9 per cent increase in royalty income in 2019-20.”
Mr Everingham said with more than $129 billion of projects either underway or in the pipeline, WA’s mining and resources sector would continue to play a major role in securing and growing the State’s economic future and helping the WA Government fund education, healthcare and government services.
CME welcomed funding in the 2020-21 State Budget towards regional infrastructure and roads, red tape reduction initiatives, and education and training facilities and courses to meet resource sector needs and boost STEM in schools.