State Budget 2020-21: CME Position
Today’s Budget further cements the critical role the resources sector has and will continue to play in supporting the WA economy through COVID-19 and into recovery. Off the back of this foundation, the Government’s redirection of its fiscal strategy from paying down debt to supporting economic recovery through jobs creation and growth is strongly endorsed by CME.
CME is pleased to see no increases to taxes or royalties outlined in the Budget, however, we will continue to urge the Government to commit to this over the forward estimates. Ensuring debt levels remain manageable and augmenting the current infrastructure-focused recovery spending with other incentives to stimulate business investment and job creation will be important as the Government shifts into the next phase of its fiscal strategy.
As uncertainty on the long-lasting effects of the global pandemic continues, CME notes there remains significant downside risks which could significantly alter Budget forecasts over the next 12 to 18 months. The inclusion in the Budget of Treasury’s analysis of a second wave scenario is welcome and highlights the volatility caused by COVID-19 response measures. Modelling assumptions on the timing of the eventual relaxation of both the WA hard border and the international border are helpful, however, a clear Government policy position on anticipated timeframes will be critical to support business confidence and economic growth.
Over the last few months, the Government has announced funding for several infrastructure projects across regional and remote WA. The significant Budget allocation over and above Royalty for Regions funding is welcomed. CME supports investment in regional infrastructure, particularly where it will increase transport connectivity and therefore productivity of the WA economy. Allocation of an infrastructure investment facilitation unit within the Department of Finance and continued pursuit of regulatory reforms to increase the efficiency of associated approvals processes are also welcome.
CME will continue to review the Budget over the coming weeks and looks forward to ongoing reforms to cut red tape and lift the State’s economic growth potential.