THE strength of Western Australia’s economy is no surprise given the level of business investment, Treasurer Troy Buswell says.
A report by equities trader CommSec says that WA’s economy is expected to remain the best performing in the nation this year, underpinned by its growing population.
The report released today showed the state had the strongest retail trade, equipment investment, completed construction work and population growth, but second-placed Northern Territory had closed the gap.
WA was the second strongest state or territory with regard to retail trade and housing finance.
On unemployment, it ranked third while it placed fifth on dwelling starts.
CommSec said both WA and the Northern Territory were likely to hold their top positions over 2013, thanks to population growth.
Mr Buswell said the state’s strong performance was no surprise, with much of the strength driven by business investment.
It was “head and shoulders” above other states and territories in equipment investment, Mr Buswell said.
“Strong population growth, including high rates of migration to the state, demonstrates confidence in current conditions and future prospects for WA,” he said in a statement.
WA is one of three Australian states – alongside NSW and Victoria – to hold a AAA credit rating with Standard & Poor’s and Moody’s Investors Service.
But the ratings agencies warned in December that the mining state was at risk of losing this rating because of high debt levels.
In its Mid Year Economic Review released last month, WA’s Liberal government warned the state’s books were tipped to slide into the red by $187 million in 2013/14 amid softer mining royalties.
The Barnett government expects a surplus of $140 million for the current financial year, down from the budget estimate of $196 million, although iron ore prices have bounced back since that estimate.
The Opposition meanwhile says housing will be a big issue in the coming state election, claiming that a fall in dwelling starts amid a rising population shows the government has failed to manage the boom.
While the CommSec report ranked WA in first place for retail trade, equipment investment, completed construction work and population growth, it placed the state fifth for starting new home construction.
Opposition treasury spokesman Ben Wyatt said a rapid increase in home rental prices and a fall in housing approvals was concerning.
“When you get massive population growth and yet the government fails in respect of new housing, that ensures that Western Australians aren’t getting benefit from our good economic times and are in fact being punished by the poor management of our boom by the Barnett government,” Mr Wyatt said.
“In 2012, we had 11,000 housing approvals and compare that to 2007/08 when we had 18,000.
“It’s not sustainable and more Western Australians will end up having year-in, year-out increases in their rent by over 13 per cent, which is what we had in 2012.”
Mr Wyatt said land releases needed to be sped up and made more efficient to help relieve WA’s housing pressure.
January 21, 2013
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