World News – UA – Five months late, WA will register a surplus, but at what cost?

It should come as no surprise that the state budget is a little different this year

In an extraordinary year that saw an international pandemic wreak havoc on global finances, WA’s budget was delayed by nearly five months, necessitating the passage of special legislation to ensure the supply

Treasurer Ben Wyatt was forced to spend hugely on frontline services and support packages for households and businesses and embarked on an investment of $ 5 Billion Coronavirus Recovery Program in the goal of helping the state to rebound

COVID-19 has also caused a major personal about-face for the treasurer, who announced in February that he would step down from politics in next year’s election, only to reverse the decision weeks later as the massive economic impact of the pandemic was starting to become apparent

Yet amid the challenges, the treasurer announced last month that the state had withdrawn an unexpected $ 7 billion surplus and the economy had in fact grown 11 percent

Another Queensland mining state announced last month that it was $ 8 billion in the red for fiscal year 2019-20, with NSW and Victoria expected to run multibillion-dollar deficits for the same period

WA’s surplus led state and federal liberals to question whether it was appropriate for a state to run a surplus during a pandemic

Of course, that was nearly a billion dollars less than expected in those heady, pre-pandemic days of December of last year, when the good times rolled around and no one cared much about an outbreak. unusual pneumonia in Wuhan, China

But then, no one expected the WA government to convert Perth Stadium into a giant high-level command center for disease control (temporarily, as it turned out), nor to transform state into an almost impenetrable fortress that everyone desperately returned travelers to billionaire businessmen have been barred from crossing

The fact that we live in strange times is illustrated by the ideological backflips that are happening across the political spectrum

The conservative side of politics often says labor cannot be trusted with the economy, but the Labor government in WA reports a surplus, despite what 2020 has thrown at it

And the Liberals, who have always been focused on minimal state intervention, are not happy with it and want the government to spend more to help struggling households

Iron ore prices are 26% higher than expected, averaging US $ 929 ($ 13940) per tonne, and since June 30 they have increased further, up to US $ 130 per tonne a few weeks ago

However, China’s demand for ore is expected to decline a bit next year as its post-pandemic stimulus is muted, and Brazil is expected to resume its pre-pandemic iron ore export levels, which will lead to lower prices

On the positive side, gold has lost none of its luster and some even think Australia will take over from China as the world’s largest gold producer

Around 70% of the country’s gold production comes from WA, and with the price of gold at near all-time highs this should translate into a decent share of royalties for the state

But M Wyatt warned that future surpluses will not be as healthy as they would have been otherwise

And he is keen to use the extra money that is lying around for job creation projects, not to pay off his debt

Unemployment in WA fell to 7 percent last month, from a high of 87% in June, and WA is no longer the worst performing state on that front

The unemployment rate remains at a historic level, and the vast majority of new jobs created in recent months are part-time

At the same time, increased social assistance benefits are cut from the end of September, and although the state government has no control over this, it is clear that the measure will have an impact on the quality of life of a significant number of West Australians

The challenges facing the state government in the future remain immense and the pandemic is far from over

How the budget responds to these challenges will help shape the state’s fortunes as we finally emerge from an unprecedented era

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Western Australia, Mark McGowan, Ben Wyatt, Government Budget, Australian State