PERTH (miningweekly.com) – The Western Australian resources sector has contributed more than A$7.23-billion in royalties and grants, contributing to the state government declaring an operating surplus of A$553-million for 2018/19.
Western Australian Treasurer Ben Wyatt has predicted an operating surplus of A$1.5-billion for 2019/20, and over A$2-billion to 2022/23.
The Chamber of Minerals and Energy of Western Australia (CME) on Thursday pointed out that the revenue stream from the resources sector was the third-largest contributor to the state economy, behind taxation and commonwealth grants.
CME CEO Paul Everingham said Western Australia’s resources sector would account for 23% of state revenue in 2019/20, with a sharp rise in iron-ore prices significantly contributing to government efforts to reduce debt.
“We congratulate the state government for the budget’s first return to surplus in five years and projected economic growth of 3.5%, which has been fueled by strong growth in exports for liquefied natural gas (LNG), lithium and gold, combined with increasing business investment on a wave of new resource sector projects in iron-ore and lithium,” he said.
“Compared to other industries across the state, Western Australia’s resources sector is doing the heavy lifting in terms of its economic contribution to the State’s economy by way of royalties, government payments, business purchases and the wages and salaries of the more than 113 000 people the sector employs locally.
“We are pleased the government has recognised the positive impact of the significant investment in new and replacement iron-ore mines and lithium projects on Western Australia’s economy, which will support a return to growth in business investment, improve job prospects for West Australians and boost confidence and household spending.”
Everingham said that the contribution of A$10-million over ten years to help develop a world-first micro-scale LNG plant as part of an LNG futures facility in Kwinana was great news for the gas sector, and would mean the development of new technologies and processes and the creation of up to 1 400 jobs for West Australians.
“CME has always maintained that a strong resources sector means a strong economy and today’s return to surplus is indicative of just how vital our sector is in helping the state’s economy recover and grow.”
Everingham said he was pleased that the government had adjusted its iron-ore price forecasting methodology to assume lower forecast prices in the next few years, which was a more realistic and responsible approach than was previously undertaken.
He applauded the state government for its "sound financial management", particularly in its measures to cut spending in the public sector, noting that the CME had consistently called for government to rein in expenditure growth in order to manage the state’s finances and reduce debt.
“This is a more sensible and sustainable alternative to increasing royalties rates, which is a simplistic approach that harms and threatens Western Australian jobs as well as our international reputation as a safe and stable place to invest.”