❓ The Premier addresses concerns about a global recession, highlighting WA's strong economic position due to responsible financial management and strategic policies like the domestic gas reservation, contrasting it with challenges faced by other states.
AnsweredQoN 647Legislative Assembly
QuestionView source ↗
M c GOWAN
GOVERNMENT — ECONOMIC MANAGEMENT
647. Ms C.M. ROWE to the Premier:
I
refer to the McGowan Labor government's commitment to maintaining a strong
economy and responsible financial management. Can the Premier update the
house on this government's approach to the growing risk of a global
recession and outline why it is important that WA maintains a strong economic
and budgetary position?
GOVERNMENT — ECONOMIC MANAGEMENT
647. Ms C.M. ROWE to the Premier:
I
refer to the McGowan Labor government's commitment to maintaining a strong
economy and responsible financial management. Can the Premier update the
house on this government's approach to the growing risk of a global
recession and outline why it is important that WA maintains a strong economic
and budgetary position?
AnswerView source ↗
I thank the member for Belmont for
the question. The risk of a global recession is increasing. The federal budget
last night indicated that. To quote the federal Treasurer —
High inflation is sapping momentum
and global growth is slowing by more than expected, with some major economies
stalling or contracting.
In a report released last
month, the Commonwealth Bank slashed its forecast for global economic growth
next year to just 1.6 per cent and forecast recessions in the United States,
the United Kingdom, the Eurozone and Japan. It also indicated, as I said, that
economically the world is in trouble. There are a range of reasons for that. We
all know about the situation in Russia and Ukraine, the hangover from the
pandemic, and the enormous expenditure that took place in most places around
the world. The inflationary impact of all that is impacting on the economy.
Western Australia is a trading
state, more so than any other part of Australia. We are exposed to what happens
internationally and we need to be very careful about what occurs in the future.
Chances are that we will receive less for our exports. Chances are, therefore,
royalties will decline. That is why need to keep ourselves in a strong
budgetary position. The federal Treasurer said this last night —
�
our best defence against uncertainty around the world is responsible economic
management � at home.
This government will continue to
deliver that, because that is what will keep us in the best position for next
year and in the years ahead as all these things come to bear on our state and
on the world.
Having
said that, what is occurring interstate is also of great concern. We saw
yesterday—it has been reported now for a while but it appears to
be coming to pass—that there are massive increases in the cost of
living and the cost of electricity and gas in other states of Australia. They
are saying that in other states of Australia there will be an increase in electricity of somewhere in the
vicinity of 50 per cent, and gas prices are expected to grow by 40 per cent in the next couple of years. For some wholesale markets, it will be by up to
100 per cent. That will have a massive impact on households around the country.
The good thing is that Western Australia is in a much better position for two
reasons. The first reason is that in 2006 the then Premier Alan Carpenter and
his government put in place the domestic gas reservation policy that we
implemented to ensure —
Several members interjected.
The SPEAKER : Order, please!
Mr M. McGOWAN : The good thing
is that the former Labor government of Alan Carpenter put in place the domestic
gas reservation policy. That policy was attacked. I recall the attacks. The
Liberal Party attacked it. Do members
remember Ian Macfarlane? He described it as being like a Hugo Ch�vez policy in
Venezuela. Now, it is the envy of Australia. All the other states are
asking, ''Why didn't we do that?'' The WA Labor
government of Alan Carpenter put it in place in 2006, and we have implemented
it on projects since then. It is not easy, trust me, but we did it.
The second thing is that we have
kept our electricity assets in government hands. New South Wales sold its
assets all on the basis that that was the right thing do. That created chaos
inside the NSW electricity market and, secondly, it blew out debt. NSW got
billions of dollars for it, but its debt has climbed twentyfold since this NSW
government has been in office. We did not sell our electricity assets. We
managed the finances well. We have a well-managed electricity system and we are avoiding the chaos of the east. Who was it
who wanted to sell off our network? It was the Liberal Party here in 2017. We all remember that. That is what it
wanted to do. That might explain partly—I s ay only partly—its
current position.
The
good thing is that Western Australia is in a good position, but there are
difficult days and difficult waters ahead that we will have to navigate.
We are going to make sure that we keep ourselves in as good a position as we
can in the lead-up to that.
the question. The risk of a global recession is increasing. The federal budget
last night indicated that. To quote the federal Treasurer —
High inflation is sapping momentum
and global growth is slowing by more than expected, with some major economies
stalling or contracting.
In a report released last
month, the Commonwealth Bank slashed its forecast for global economic growth
next year to just 1.6 per cent and forecast recessions in the United States,
the United Kingdom, the Eurozone and Japan. It also indicated, as I said, that
economically the world is in trouble. There are a range of reasons for that. We
all know about the situation in Russia and Ukraine, the hangover from the
pandemic, and the enormous expenditure that took place in most places around
the world. The inflationary impact of all that is impacting on the economy.
Western Australia is a trading
state, more so than any other part of Australia. We are exposed to what happens
internationally and we need to be very careful about what occurs in the future.
Chances are that we will receive less for our exports. Chances are, therefore,
royalties will decline. That is why need to keep ourselves in a strong
budgetary position. The federal Treasurer said this last night —
�
our best defence against uncertainty around the world is responsible economic
management � at home.
This government will continue to
deliver that, because that is what will keep us in the best position for next
year and in the years ahead as all these things come to bear on our state and
on the world.
Having
said that, what is occurring interstate is also of great concern. We saw
yesterday—it has been reported now for a while but it appears to
be coming to pass—that there are massive increases in the cost of
living and the cost of electricity and gas in other states of Australia. They
are saying that in other states of Australia there will be an increase in electricity of somewhere in the
vicinity of 50 per cent, and gas prices are expected to grow by 40 per cent in the next couple of years. For some wholesale markets, it will be by up to
100 per cent. That will have a massive impact on households around the country.
The good thing is that Western Australia is in a much better position for two
reasons. The first reason is that in 2006 the then Premier Alan Carpenter and
his government put in place the domestic gas reservation policy that we
implemented to ensure —
Several members interjected.
The SPEAKER : Order, please!
Mr M. McGOWAN : The good thing
is that the former Labor government of Alan Carpenter put in place the domestic
gas reservation policy. That policy was attacked. I recall the attacks. The
Liberal Party attacked it. Do members
remember Ian Macfarlane? He described it as being like a Hugo Ch�vez policy in
Venezuela. Now, it is the envy of Australia. All the other states are
asking, ''Why didn't we do that?'' The WA Labor
government of Alan Carpenter put it in place in 2006, and we have implemented
it on projects since then. It is not easy, trust me, but we did it.
The second thing is that we have
kept our electricity assets in government hands. New South Wales sold its
assets all on the basis that that was the right thing do. That created chaos
inside the NSW electricity market and, secondly, it blew out debt. NSW got
billions of dollars for it, but its debt has climbed twentyfold since this NSW
government has been in office. We did not sell our electricity assets. We
managed the finances well. We have a well-managed electricity system and we are avoiding the chaos of the east. Who was it
who wanted to sell off our network? It was the Liberal Party here in 2017. We all remember that. That is what it
wanted to do. That might explain partly—I s ay only partly—its
current position.
The
good thing is that Western Australia is in a good position, but there are
difficult days and difficult waters ahead that we will have to navigate.
We are going to make sure that we keep ourselves in as good a position as we
can in the lead-up to that.
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