‘WA economy has stood tall’: Federal Treasurer Josh Frydenberg talks up State’s bright economic future

Federal Treasurer Josh Frydenberg says West Australians have a bright economic future with “many sectors” performing well and helping to lead Australia out of the first recession in almost 30 years. Speaking to The West Australian ahead of this morning’s Leadership Matters breakfast, Mr Frydenberg said WA need not worry if mining output reduced because there was a range of growing industries to support local jobs. “The WA economy has stood tall in the face of the COVID-19 recession and is helping to lead Australia’s economic recovery,” Mr Frydenberg said. “With agriculture, construction, housing and mining all performing strongly the future is bright for WA. Australian iron ore exports — of which WA accounts for 99 per cent — reached about 858 million tonnes in 2019–20, with a total value of $102.9 billion. Iron ore prices reached $US175.6 a tonne on Tuesday, the highest since May 2011. Mr Frydenberg’s comments on the strength of the WA economy come as it can also be revealed Treasury data shows WA is the State with the highest take-up of the Federal Government’s HomeBuilder program. HomeBuilder was a support package announced during COVID that provided grants of up to $25,000 to eligible owner-occupiers to build a new home or substantially renovate an existing home. Data obtained by The West shows almost $500 million in Homebuilder applications were submitted by West Aussies — the highest of any State on a per capita basis — with housing construction leading WA’s strong economic recovery. WA has had nearly 20,000 Homebuilder applications which Treasury expects will support up to $4.5 billion in residential construction activity. This is more than 60 per cent of the dwelling investment recorded in 2019-20 or 1.4 per cent of gross state product. About 80 per cent of construction activity in WA is now supported by Homebuilder, according to the analysis. The strong turnaround in the housing market is being led by owner occupiers. New loan commitments in WA have more than doubled over the past year — up 103.7 per cent. First-homebuyers represent 48.2 per cent of new lending to owner occupiers,the highest share in the country. Stronger buying interest is supporting a turnaround in Perth house prices which are 6 per cent higher than a year ago and comes after more than six years of negative annual house price growth following the mining boom. Mr Frydenberg said HomeBuilder had been a key success, particularly in WA. “The successful HomeBuilder program has been a key part of the Morrison Government’s national economic recovery plan and is seeing the private sector lead the recovery as it takes advantage of the Government’s tax cuts, business investment incentives and record levels of investment in skills, training and infrastructure,” he said. Mr Frydenberg is the fourth Federal Government heavyweight to visit WA in several weeks. Communications Minister Paul Fletcher, Defence Minister Peter Dutton and Prime Minister Scott Morrison have made special trips west. Mr Morrison had been absent from WA for 537 days but was greeted with requests for selfies and hugs from those he met on the hustings. He travelled north of Perth to Andrew Forrest’s Christmas Creek iron ore mine in the Pilbara and also toured the cyclone-ravaged tourist town of Kalbarri. Mr Frydenberg won’t travel outside Perth during his lightning visit. He will hand down the Federal Budget on May 11, just seven months after the unusual COVID-19 October budget. WA may end up underpinning the success of the overall Budget with higher than expected iron ore prices. The mid-year economic and fiscal outlook released in December predicted iron ore prices would fall to $US55 a tonne by September 2022. But that is highly unlikely with the current record high prices and continued lack of supply out of Brazil. Chinese demand for iron ore is also not slowing, despite warnings yesterday from the Deputy Head of Mission for China, Wang Xining, that China was not a cow “to be milked” and taken advantage of by Australia. Booming iron ore export prices delivered a $16 billion improvement to the Federal Budget’s bottom line from October to December and are also expected to significantly buoy the books in 20 days when the Federal Budget is delivered. Grace Orsi is among the young West Australians clamouring to get into the red-hot housing market now that the economy has picked up and uncertainty created by the pandemic has begun to clear. “I have been saving eight years for a home,” she said. “I don’t want to rent any more, it just seems like a waste of money for me.” Ms Orsi, who works part time as a paralegal and is studying law, had hopes of buying in her “dream area” of East Perth, Mt Lawley or North Perth but is now looking further afield. She was prepared to buy early last year but held off because of COVID uncertainty.

‘WA economy has stood tall’: Federal Treasurer Josh Frydenberg talks up State’s bright economic future

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