Gains need brains
WA's solid economic performance was underscored last week when Premier Mark McGowan released the State Budget. WA's domestic economy has grown by 5.7 per cent since the start of the pandemic – around double the growth of the rest of the country.
We are certainly in an enviable position. As the only Australian state with a significant budget surplus, we have an unmatched opportunity to lock in long-term economic prosperity, grow our population, diversify our economy and focus on the future.
The McGowan Government understands this, and the budget delivered a clear call to action. Now is the time for government investment to “use the financial success and prosperity of today to provide better infrastructure and services for the future,” the Premier said.
We are poised for a future where Perth's economic diversification, strategic proximity to southeast Asia and a median house price of just $515,000 make for a winning combination. But our success requires two essential ingredients: workers and homes.
In 2020, job vacancies in WA increased by nearly 45 per cent. Earlier this year, a survey of Property Council WA members found 86.1 per cent of businesses were finding it hard to fill job vacancies. While WA businesses have not, to date, experienced the full impacts of prolonged lockdowns, our challenges are still acutely felt. We have been unable to grow our workforce to meet demand, while labour and supply costs have escalated.
Meanwhile, Perth’s residential vacancy rate remains at a decade low, hovering below one per cent. House prices are growing at their fastest rate since 1989 – something that is good news for homeowners but not for home buyers.
Positively, the McGowan Government has acted to address some of the immediate issues and is adjusting the policy settings for our state’s gradual reopening to the world.
The budget promises to address general market affordability with measures that will maintain private rental investment and improve the time and cost it takes for residential projects to meet the market. A social housing investment of $2.1 billion over the next four years will support our most vulnerable, while continuing the 50% rebate on stamp duty for off-the-plan apartments will maintain investor confidence and rental housing supply.
Housing affordability is underpinned by a system that is responsive to demand and free of red tape, so we also welcome the $120 million for regulatory and approvals reform. While the costs associated with red tape and planning delays are difficult to estimate, Property Council modelling has found costs equal to just one per cent of the value of building permits in the first six months of this year would exceed $80 million.
While all these measures are worthy of applause, WA’s economic success relies on attracting talent to fill the 34,000 jobs Treasury estimates will be created in the next 12 months alone.
WA businesses are crying out for people. What we need now from government is an unwavering commitment to population growth so that WA wins the ‘brain gain’ competition in 2022 and beyond.
How do we do this? WA businesses can leverage the $4 million government campaign targeted at attracting talented interstate and Trans-Tasman workers. Governments at all levels can prioritise implementing safe international migration pathways for skilled migrants. We can develop an international student attraction strategy that supports our economic recovery and brings vibrancy to Perth’s city centre. We can petition the Federal Government to allow existing visa holders who relocate to WA from Australia's bigger cities to receive a visa extension and make WA home.
These are just four ideas to ensure Perth is not just among the world’s most liveable cities, but also a magnet for global talent.
Sandra Brewer is Property Council WA executive director. This opinion piece was first published in The West Australian, Wednesday 15 September 2021.