“A tale of two countries” was how West Australian Premier Mark McGowan described Australia’s economic environment to the state’s business elite on Friday morning.
Fresh from handing down yet another multibillion-dollar budget surplus, the premier-cum-treasurer did not hold back in his assessment of his interstate counterparts grappling with surging inflation and record debt.
“If they have problems, they really need to look in the mirror,” he told the Crown Ballroom at an annual post-budget breakfast, slapping down any suggestion the stark economic contrast between the west and east coasts could be rebalanced by future GST reform.
Premier Mark McGowan … joked he was comfortable for WA to continue to support its poorer neighbours.
With a forecast $3.3 billion surplus, Western Australia’s 2023-24 budget outlined a 4 per cent unemployment rate, 3.5 per cent CPI increase and wage growth of 4 per cent.
“Our economy is running very, very hot,” Mr McGowan said.
As the premier boasted of his state’s economic success to the city’s corporate crowd, Perth restaurateur Edward Wolkowinski was preparing the Heritage Wine Bar for yet another day of fully booked service.
The owner and manager of the upmarket CBD venue does not need the premier to tell him Perth is booming.
He said the city’s corporate players had not tightened their belts and were splashing cash on long lunches featuring caviar, oysters and WA line-caught fish that could be traced back to the boat that landed them.
Edward Wolkowinski is the owner and manager of the Heritage Wine Bar in Perth’s CBD. Trevor Collens
“We go from strength to strength in the CBD because of the amount of city and state investment. It means there are more people travelling here for business, which means that the hotels are getting busier,” Mr Wolkowinski said.
“They all want to go out for dinner, which means that companies are paying to entertain people here to show them a good time while they’re investing here. So, we’re great.”
The wine bar is in the historic Royal Insurance Building at the base of the Brookfield Place towers – home to BHP and PWC – and offers private rooms, set lunch menus and close to 80 wines by the glass.
Mr Wolkowinski said the 10-year-old venue largely catered to Perth’s business scene, and patronage had surged back post-COVID-19.
“The city streets are busier, you can always feel it when you come in. You’re either on the bus or the train or driving in and, typically, it’s getting harder to find parking,” he said.
“A lot of what we do is heavily supported by corporate spending, when it’s put onto a company card, so all of that incoming investment that’s coming in with all the towers, and all the new offices that are going up.”
WA Chamber of Commerce and Industry chief economist Aaron Morey said West Australian workers had more discretionary income because of the high wages generated by the mining sector, paired with lower spending pressures such as household bills.
“Getting more money in the pockets of residents at the same time as we don’t have some of the spending pressures and therefore, you know, less has been taken away from that discretionary income,” he said, pointing to WA’s final demand of 3 per cent for 2023-24.
“While we have our challenges, we actually don’t have anywhere near that burden here in WA, and we don’t have the energy crisis that they’re facing over east as well.”
The key challenge facing WA businesses was attracting staff, Mr Morey said, something that Mr Wolkowinski said was felt at the Heritage Wine Bar.
“If things get too expensive, we change the dish, so the biggest [issue] is staffing, that’s the hardest one,” he said.
“Even when we bring in casual labour for key services on the weekends … we find that we struggle to hold on to them because they make their way on a lot quicker than they have done in the past.”
As Perth diners continue to flock to the city’s restaurants, Mr McGowan joked he was comfortable for WA to continue to support its poorer neighbours through its current GST contributions.
“We’re continuing to support Tasmania … It is terrific that we’re all contributing to a new stadium,” he said.
“And probably paying for the AFL team that will go there as well, but it’s great to help those less fortunate than ourselves, which is what we do as West Australians.”
Despite enjoying $11 billion of mining royalties in the last financial year, with another $7.8 billion expected for 2023-34, Mr McGowan said any federal party that attempted to reform the GST would suffer consequences in his state.
“Any political party nationally that crosses that will suffer dire consequences in Western Australia, so I think it’s here to stay,” he said, referring to the 70¢ in the dollar floor on WA’s GST return.
“If their budgets are in the red, if they’re losing their credit ratings, and so forth, it’s not because of the GST deal.”
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