The economy of Western Australia is proving resilient despite facing high payroll taxes, underfunding of venture capitals, skill shortages and rising costs of doing business.
While Aaron Morey, Chamber of Commerce and Industry WA chief economist, is confident about the state's economy being resilient despite inflation, cautionary spending and the cost-of-living crisis all making headlines, businesses are still facing burdens.
“It's really important we highlight how confident we are, as we see the economy resilient and robust at the moment, because we're under a bit of a global fight for capital right now,” Morey said on stage at AdNews’ Perth L!VE.
As WA recently had a premier change, Clive Bingwa, Nine’s Perth managing director, asked what are the key sectors that the new government should focus on to ensure a stable economy for businesses.
“Payroll tax at the moment is quite high in Western Australia, that's because we have really big mining companies and so the state government tries to ensure those big guys pay their fair share,” Morey said.
“But it does certainly trickle down in terms of those mid-sized businesses, so that's an area that we really want to push them on.
“Another area where a little bit underweight is VC funding - it is really important to have VC fund managers in the city, able to have coffees with the entrepreneurs.”
For example, Morey identified WA as one of the best places in the world for space exploration, with many WA SMEs in that space cultivating great innovation and startups.
“We've only got around 2% of national VC funding,” Morey said.
“And there's no reason why we shouldn't be getting 10% population share or even 15% economy share. That will really help to fast track all that innovation that's currently occurring in autonomous and remote technology, space, defence and the life sciences in particular.”
The state’s skill shortages, despite softening, was also identified as an issue to the market.
“Every quarter we ask our members, what are the barriers to your business going forward? And for almost two years around 4 in 5 have been identifying a shortage in terms of a skilled or unskilled worker, as being the barrier,” Morey said.
“It's just been overtaken by the rising costs of doing business and it's not unrelated as wage costs have gone up significantly more than what you read in the newspapers.
“We are just starting to see it soften a little in our own metrics like vacancy rates but we still have a really tight labor market. Which is a good problem, as it's indicative of a really strong economy and those rates hold despite the internal migration that we're attracting.”
Thank you to our supporting partners for Perth L!VE: Boomtown, Nine, Longreach Media and MiQ. And friends of AdNews: Perth Advertising and Design Club (PADC), The Western Australia Marketing Association (WAMA) and The Independent Media Agencies of Australia (IMAA).
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