A partnership for prosperity: WA and the 2023 Budget
Address to the Seven West Leadership Matters Breakfast, Perth
Can I begin by acknowledging the Whadjuk Noongar people, their Elders, customs, and traditions.
The vote on a Voice to Parliament is all about giving the First Nations people of this country and state, a say in the matters which impact them –
And I look forward to the chance that we’ll all have later in the year to move forward in a spirit of unity, recognition, and respect.
Thanks to Harlene for that kind introduction – and to all the supporters and sponsors – it really is fantastic to be back in Perth for the fourth time as Treasurer.
And for the second time in seven months as a post‑Budget speaker here as a guest of Seven West.
The week after the Commonwealth Budget is handed down is such a welcome and cherished opportunity to speak with people right around Australia, about different parts of our plan and what it means for their industries and communities.
In Brisbane we focused on housing.
In Western Sydney, energy efficiency and renewables.
On the Central Coast of New South Wales, bulk‑billing and Medicare.
To the west of Melbourne, skills and training.
In Adelaide, wages and the cost of living.
And in Logan tomorrow, manufacturing and local jobs.
But here, in WA, you’ve found a characteristically efficient way of bringing us together –
By collecting what seems like a pretty significant proportion of Western Australia’s leaders right here in one place –
Including the Premier, my friend, Mark McGowan, and about half his Cabinet.
Mark, late at night a few days ago, I stumbled across a picture of you in the lead up to your own Budget – Swan Draught on the table, KFC next to you, ready to deliver your surplus –
It might be the most West Australian photo on the internet.
But, in all seriousness, what that does indicate is that you’re in the midst of a very busy time – your own post‑Budget blitz – and I really appreciate you being here.
To my ministerial colleagues Stephen Jones and Madeleine King – thanks for all the important work that you did in helping to deliver this Budget –
And I also see that Josh Wilson and Zaneta Mascarenhas are here – great local members for Fremantle and Swan, and important parts of our team.
I couldn’t speak at an event organised by Seven West without acknowledging Kerry and Christine –
Or the chief editor of The West Australian, our host today, Anthony De Ceglie.
Katina, to say I’m looking forward to the grilling you’re bound to give me later on, might be overstating it a bit –
But as one of the most trusted, reliable, insightful members of the Canberra press gallery, I know you’ll do a cracking job.
And to all of you, here this morning:
From your finest universities –
Leaders of your wealth creating industries –
Local representatives and more –
That so many of you have gathered today is, I think, typical of a state that has always been willing to engage with the big national conversations, but from a WA perspective.
And I value the opportunity to do that today – to take some time with you this morning to pause, take stock and explain why I think what we delivered last Tuesday did mark not just another staging point of progress for our country –
But perhaps also a partnership for prosperity between the Albanese government and the people and industries of WA.
Western Australia in the national economy
Of course, our Budget wasn’t the only one handed down recently.
The WA Budget, two days after ours, was close both in time, and in the priorities and values it expressed.
The first and most obvious alignment is that we’re forecast to join you in running a surplus for 2022‑23 –
But the truth is, that WA has been on this train for a while now.
This will be your sixth consecutive operating surplus, and while the Federal Budget is due to clock a modest deficit in 2023‑24, you’re looking at a $3.3 billion surplus that year, and are due to run one every year of the forward estimates after that.
I don’t say this to imply that either of our governments seek to deliver surpluses or better Budgets for the sake of it.
But because, for both of us, they’re the more sustainable, more solid foundations we’re trying to build on, helping people with the pressures they’re facing now but investing in the future at the same time –
And there’s alignment here too.
You can see it in the way that we both view delivery of support for people that need it and responsible economic management as mutually reenforcing, not exclusive –
Something that you showed through your work with us on energy bill relief and in the delivery of your own cost‑of‑living package –
You can see it in the way that we’re both focused on the need to engage with the drivers of our long‑term prosperity – demonstrated by your investments in the energy transformation –
And you can see it in our joint commitment to guarantee the delivery of essential services that all Australians need.
It’s only right that I pause here and pay tribute to the work that Mark did with the Prime Minister on primary care and with me on energy relief and housing –
And I know that our government continues to look forward to working with yours, as we look for common ground in our common interests.
So, I think it’s clear from all this, that there are really quite remarkable through‑lines between the things that we tried to do and the things that you tried to do last week.
But, in delivering on these priorities, we did have to work within different parameters and to different outlooks.
Our Budget Statement Two, revealed some of the immediate challenges we’ll have to face in the national economy –
With inflation higher than we’d like, for longer than we’d like, but tracking in the right direction – due to fall from 6 per cent this year to 3 ¼ per cent in 2023‑24, before returning to the RBA’s target band in the year after.
These price pressures, along with high rates and challenges coming at us from overseas, all mean that our economy is due to slow considerably – from 3 ¼ per cent this year, to 1 ½ per cent in the next.
Western Australia won’t be immune from all of this, but your own Budget shows just how well placed you are.
Take price pressures for example.
As recently as the June quarter of 2022, Perth had the highest rate of CPI of any capital city – as of the March quarter this year, it’s now the lowest.
A big reason for that turnaround is how you’ve been able to sensibly manage your energy needs, over a long period of time now.
Just to give you a sense of this, growth in electricity prices through the year to March sat at 15.5 per cent nationally –
For Western Australia, the figure was 3 per cent.
That – along with the cost‑of‑living relief that you’re delivering –
Says something about the foresight underpinning the structure of your energy market –
And it’s not the only area where WA is an exemplar.
Take your growth performance.
Yes, you face headwinds like the rest of the country, particularly from a slowing global economy –
But you’re still set to expand at a faster rate than the rest of Australia –
At 4 ¼ per cent in 2022‑23, a whole one percentage point above what our Budget forecast for the nation –
And 2 ¼ per cent next year, compared to 1 ½ per cent for the whole of the country.
This performance is being driven in large part by exports –
From mining and resources, but also agriculture – supported by a record harvest – and increasingly, value‑adding.
And it’s here, when thinking about your state as an export powerhouse, that your role in the national economy really is most obvious.
WA goods exports reached a record $272 billion over the year to March 2023 –
That’s 44.7 per cent of our total exports as a nation.
For a state that has around 10 per cent of our total population, that’s quite a figure –
As is 18 per cent – the contribution you make to GDP.
And the contribution that your resources sector makes to our overall revenue base is critical – including to the welcome near‑term improvements we’ve seen over the last two budgets.
All this means that Western Australia’s interests are inextricably linked to our national interest –
And to our ability to keep on making the investments, securing the services, and delivering the better futures that we want for all Australians.
That’s why I recognise and celebrate your central role in our economy and in our Budget – and I thank you for it.
A Budget for Western Australia
It’s also why we set about crafting what we delivered last Tuesday with the interests of Western Australia front of mind.
And what I would like to do now, is to take a few minutes to run you through the four core things that we sought to deliver for your state.
One, getting WA it’s fair share of GST.
Two, cost‑of‑living relief to help West Australians doing it tough.
Three, investments in the future of WA industries.
And four, new initiatives in skills, migration and housing to make sure that your businesses, and people, can reach their potential.
A fair share of GST
First, to GST.
Given the contribution that WA makes to the national economy, to national revenue – it’s only right that you get your fair share.
Historically, you’ve done really well out of it.
But the 10 cents in the dollar that you received under the former government was nowhere near reflective of the contribution that you make.
And I’m proud of, and committed to, the changes that went a long way towards rectifying this.
The Budget showed that getting 70 cents in the dollar will be worth an additional $5.62 billion to you in 2023‑24 –
And an extra $23 billion over the forward estimates.
I hope that demonstrates that we will always try to do what’s right by Western Australians.
We believe this arrangement better reflects the contribution that WA makes to the national economy –
And that’s why we are sticking to it.
The second important set of commitments in the Budget for Western Australians was the relief that we delivered to alleviate cost‑of‑living pressures without adding to inflation.
Thanks to our historic investment in Medicare, in wages, because of our determination to deliver responsible, and targeted relief:
Around 1,650,000 West Australians will be able to benefit from free consultations at their GP –
And around 620,000 will get access to cheaper medicines.
Plus, 498,000 of your households will be eligible for the joint relief that we’re delivering to reduce energy bills –
And 79,000 will benefit from the largest increase to Commonwealth Rent Assistance in 30 years.
All this is designed to see your people through a tough year ahead –
But in this Budget, we also wanted to look beyond our immediate challenges –
And to put in place some initiatives that will help to secure the future of Western Australian industry and lay the foundations for growth –
Which is the third big thing in this Budget for WA.
Securing the future of WA industry
You’re more familiar with the benefits of being an energy superpower than any other state in the country.
LNG accounts for 20 per cent of your exports –
And your gas supply has provided the basis for the development of strong regional industries in aluminium and ammonia.
Ample sources of energy, powering the creation of industrial opportunities.
In many ways, it’s at the heart of your economic success –
And we want to help you replicate the formula in a net zero economy.
That starts with the energy transformation, and the role that WA can play in helping us on that journey.
As my colleague Madeleine King said earlier this week: the pathway to net zero runs through the Australian resources sector – and I couldn’t agree more.
WA has the minerals and rare earths that go into solar panels, batteries – all the technology that we need for electrification –
And today, Madeleine will announce close to $50 million in grants to accelerate development of critical minerals projects.
This funding will speed up the development of the sector and support new, developing supply chains in advanced manufacturing.
7 of the 13 projects identified are in WA – a reflection of your potential to contribute and add value in the new net zero economy –
And we know that you’re going to play a key role in powering our way forward too.
As we’ve acknowledged over and over again, gas is central to our economy and crucial for the energy transformation.
That’s why our PRRT changes were designed not to deter investment, diminish supply, or interfere with our key trading relationships.
I’m particularly proud of the consultative, co‑operative way that we worked through the issues with the industry –
To reach a proposal that provides policy stability, ensures Australia remains a reliable trade and investment partner, while delivering Australians a fairer share from the sale of their natural resources, sooner.
Now we can move forward through the development of our future gas strategy –
Another crucial step in setting up the framework that will help you invest and to contribute as we work our way towards net zero.
But we recognise that WA isn’t just a facilitator of the energy transformation – it can also be a direct beneficiary.
That’s the vision behind the $40 billion of investment we’re making to maximise Australia’s potential as a renewable energy superpower –
Which includes the $2 billion Hydrogen Headstart program we launched through our Budget.
This competitive program will help to shepherd our world‑leading pipeline of green hydrogen projects – many of them in WA – through to maturity.
A new renewable energy source, yes –
But ultimately something that will support the development of new industries throughout this state –
So that places like Bristol Springs can link new opportunities in hydrogen with traditional strengths in alumina, laying the foundations for Australian production of green metals –
So that battery production in Bentley can go from pilot to scale –
And so that new hydrogen power can supplement and support the processing and refining of critical minerals like lithium, cobalt and manganese in Kwinana.
So much of our plan for growth here lies at this intersection between industry, and energy –
But, to ultimately realise our potential, we need to get skills, migration, and housing right as well.
Skills, migration and housing
These are three sets of issues that come up every single time I’m here.
I know that you won’t be able to create new industries and leverage traditional strengths without the right workforce, in the right places.
It’s why we’ve allocated $3.7 billion for a revamped five‑year national skills agreement with the states and territories, part of an investment north of $4 billion in the Budget –
With a focus on making sure that all Australians have the foundational skills that they need.
Migration should never be a substitute for training but it’s important, and this is our chance to get it right – to make it work in our interests.
That’s why my colleague Clare O’Neil is reforming and redesigning the system –
Because we know how pressing your skills and labour shortages are.
And we know how important it is that we build more homes for people, near where jobs and opportunities are being created –
So that WA businesses can operate at their full potential.
Our efforts to pass the Housing Australia Future Fund are a big part of that –
But there are other important elements of our agenda, that you saw fleshed out last Tuesday:
New tax breaks to encourage build‑to‑rent housing projects, welcomed by the industry –
Expanding NHFIC’s capacity to lend to community housing –
And we are offering $1.7 billion to extend the National Housing and Homeless Agreement with WA and the other states and territories, for one year.
All on top of the biggest increase to Commonwealth Rent Assistance for three decades.
Now, before I take some questions from Katina, let me finish with a couple of reflections.
This Sunday marks our first year in office, and since that time we’ve been working methodically through the commitments we made to the Australian people –
In areas like climate, skills, economic equality for women, defence, education and in the vote for constitutional recognition that will take place later this year.
But another commitment that the Prime Minister has drawn attention to, time and time again – is his promise to regularly come to Western Australia.
I think, last week, he made it twelve visits in eleven months – meaning that he’s well exceeded his target of visiting WA 10 times in a year.
The Prime Minister’s regular engagement with WA, my presence here today, the central role played by WA ministers and members and senators in our Cabinet and caucus – is less about politics and more about your economic significance.
We simply won’t grab the big chances of the defining decade ahead without WA’s economy firing and contributing.
To successfully get to net zero –
To build new sources of growth at the intersection between industry, energy, and people –
And to take our place in the new developing supply chains of the low carbon world –
We’ll need you and the wealth creating, opportunity generating industries that call this state home.
We recognise – when the West is at its best, Australia is as well.
That’s why we come together and engage as partners in prosperity –
The Budget that we handed down last Tuesday was designed and delivered in that same spirit.
And I’m really grateful for the chance to talk with you about it today.
Thanks very much.