The vital contribution of the Western Australian resources sector continues to be highlighted in the State Government’s 2014-15 Budget.
Royalty income is forecast to account for over 25 per cent of the Government’s revenue in 2017-18, up from only 5 per cent in 2003-04.
“Western Australia’s reliance on income from the resources sector has never been greater, with an expected contribution of $7.3 billion, in 2014-15,” said Chamber of Minerals and Energy of Western Australia (CME) Chief Executive, Reg Howard-Smith.
“To put that in context, the resources sector is now funding this year’s combined total budgets for education and law and order. Or put another way it is funding the entire capital cost of the new Fiona Stanley Hospital, the Perth Children’s Hospital and new health facilities in Midland, Joondalup, Albany, Busselton, Carnarvon, Esperance, Exmouth, Kalgoorlie and Karratha,” said Mr Howard-Smith.
“The Budget papers clearly show that exports from the resources sector will continue to be the key driver of economic growth over the forward estimates period,” said Mr Howard-Smith
With exploration expenditure falling in Western Australia, our increased reliance on royalty income presents some risks to the Budget forward estimates.
“Exploration is the lifeblood of the industry. All resources projects begin with a discovery and to that end, CME welcomes the continuation of funding for the Exploration Incentive Scheme, said Mr Howard-Smith.
CME also welcomes funding for the expansion of the Perth Core Library and initial funding for the State Environmental, Water and Cultural Heritage Library.
CME urges the Government to articulate a clear path to regain Western Australia’s AAA credit rating.
“Restoration of our AAA credit rating is important to ensure Western Australia continues to attract foreign investment,” said Mr Howard-Smith.
“Measures such as planned asset sales and expansion of the Fiscal Action Plan are admirable, but the proof will be in the pudding,” said Mr Howard-Smith.
“In an internationally competitive environment, governments need to have policies in place to attract investment and promote economic development and restoration of this rating would be a positive signal to the investment community,” said Mr Howard-Smith.