Economy of Western Australia

The Western Australian economy is a state economy dominated by its resources and services sector and largely driven by the export of iron-ore, gold, liquefied natural gas and agricultural commodites such as wheat. Covering an area of 2.5 million km², the state is Australia's largest, accounting for almost one-third of the continent. Western Australia is the nation's fourth most populous state, with 2 million inhabitants (10% of the national population). [citeweb|url=http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/1309.0Main%20Features52008?opendocument&tabname=Summary&prodno=1309.0&issue=2008&num=&view=|title=Australia at a Glance 2008|publisher=Australian Bureau of Statistics|date=7 February 2008|accessdate=2008-09-10] In 2007, Western Australia's overseas exports represented 36% of the nation's total exports. [citeweb|url=http://www.ausstats.abs.gov.au/ausstats/subscriber.nsf/0/EFF65DC1D23D314FCA25741D000DC292/$File/13065_2008_reissue.pdf|title=WA at a Glance 2008 - reissue|publisher=Australian Bureau of Statistics|date=2 April 2008|accessdate=2008-09-10] In 2006-07, Western Australia’s gross state product was A$128 billion (13% of Australia's GDP), making it the nation's most productive State with a GSP per capita of $60,845 (compared with the national average of $47,610).cite web|url=http://www.ausstats.abs.gov.au/ausstats/subscriber.nsf/0/34CE7FFF9776F3F1CA2574B30017CFB2/$File/13500_sep%202008.pdf|title=Australian Economic Indicators|publisher=Australian Bureau of Statistics|year=2008|accessdate=2008-09-11

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Structure

Overview

Western Australia's economy is largely driven by extraction and processing of a diverse range of mineral and petroleum commodities. The structure of the economy is closely linked to the abundance of natural resources found in the State, providing a comparative advantage in resource extraction and processing. As a consequence:

* the Western Australian economy is more capital-intensive than all the other states.citeweb|url=http://www.dtf.wa.gov.au/cms/uploadedFiles/structure_wa_economy_2005.pdf|title=Structure of the WA Economy|publisher=WA Department of Treasury and Finance|date=24 Jan 2006|accessdate=2008-09-10]
* Gross state product per person ($60,845) is the highest of all states (2007 national average was $47,610)
* Diversification (ie a greater "range" of commodities) over the past 15 years has provided a more balanced production base and less reliance on just a few major export markets, insulating the economy from fluctuations in world prices (eg high oil and gas prices help sustain export income when prices of other commodities such as alumina and nickel fall)
* There has been strong growth in the services (finance, insurance and property) and construction sector, which have increased their share of economic output.
* Recent growth in global demand for minerals and petroleum, especially in China (iron-ore) and Japan (for LNG), has ensured economic growth above the national average.

Western Australia's overseas exports accounted for 36% of the nation's total. The state's major export commodies include iron-ore, alumina, crude oil and liquefied natural gas (LNG), nickel, gold, ammonia, wheat, wool, and live sheep and cattle.

Resources

In global terms, Western Australia is a significant producer of a wide range of resource commodities. Australia is the world's largest producer of both bauxite and alumina, with half of national production coming from Western Australia. [citeweb|url=http://www.aluminium.org.au/Page.php?s=1005|title=Australian Industry Statistics|publisher=Australian Aluminium Council|date=|accessdate=2008-09-19] Alcoa's Huntly mine provides the feedstock for its three refineries at Wagerup, Pinjarra and Kwinana. [citeweb|url=http://www.alcoa.com/global/en/about_alcoa/map/globalmap.asp?lc=7&AState=Western_Australia|title=Alcoa WA Operations|publisher=Alcoa Australia|date=|accessdate=2008-09-19] Worsley Alumina transports bauxite from its Boddington mine to its refinery at Worsley via a 51km conveyor belt. [citeweb|url=http://www.bhpbilliton.com/bbContentRepository/20079261125733/bhpbbusinessoverview07.pdf|title=2007 Annual Report|publisher=BHP Billiton|date=12 November 2007|accessdate=2008-09-19] It is the world's third-largest iron-ore producer (15% of the world's total) and extracts 75% of Australia's 240 tonnes of gold. Diamonds are extracted at Argyle diamond mine in far north of the Kimberley region. Coal mined at Collie is the main fuel for baseload electricity generation in the state's south-west. Australia is the world's fifth largest exporter of LNG, most of which is produced by the North West Shelf Venture near Karratha. [citeweb|url=http://www.appea.com.au/index.php?option=com_content&task=blogcategory&id=144&Itemid=176|title=Energy Policy|publisher=APPEA|date=2007|accessdate=2008-09-20]

Resource sector growth in recent years has resulted in significant labour and skills shortages, leading to recent efforts by the state government to encourage interstate and overseas migration. [citeweb|url=http://www.gowestnow.com|title=Go West Now|publisher=Government of Western Australia|date=2008|accessdate=2008-09-16] . According to the 2006 census, the median individual income was A$500 per week in Western Australia (compared to A$466 in Australia as a whole). The median family income was A$1246 per week (compared to A$1171 for Australia). Recent growth has also contributed to significant rises in average property values in 2006, although values plateaued in 2007. Perth property prices are still the second highest in Australia behind Sydney, and high rental prices continue to be a problem.

Agriculture

Agricultural production in WA is a major contributor to the state and national economy. Although tending to be highly seasonal, 2006-07 wheat production in WA was nearly 10 million tonnes, accounting for almost half the nation's total.citeweb|url=http://abare.gov.au/publications_html/cr/cr_08/cr08_June.pdf|title=2008 Crop Report|publisher=ABARE|date=1 June 2008|accessdate=2008-09-13] and providing $1.7 billion in export income.citeweb|url=http://www.ausstats.abs.gov.au/ausstats/subscriber.nsf/0/EFF65DC1D23D314FCA25741D000DC292/$File/13065_2008_reissue.pdf|title=WA at a Glance 2008|publisher=Australian Bureau of Statistics|date=2 April 2008|accessdate=2008-09-10] Other significant farm output includes barley, peas, wool, lamb and beef. There is a high level of overseas demand for imports of live animals from WA, driven mainly by South East Asia's feedlots and Middle Eastern countries, where cultural and religious traditions and a lack of storage and refrigeration facilitites favour live animals over imports of processed meat. Approximately 50% of Australia's live cattle exports come from Western Australia.citeweb|url=http://abare.gov.au/publications_html/livestock/livestock_08/LiveExports.pdf|title=2008 Live Exports|publisher=ABARE|date=31 March 2008|accessdate=2008-09-15]

Western Australia also has major wine producing regions in the South West located in the Margaret River region and Swan Valley. Several wineries produce wine for local consumption and international export. Western Australia has a significant fishing industry. Products for local consumption and export include Western Rock Lobsters, prawns, crabs, shark and tuna, Processing is conducted along the west coast. Whaling ceased at Albany in 1978.

Manufacturing

South of Perth is the heavy industrial area of Kwinana. Located here are the nation's largest oil refinery which produces petrol and diesel for local consumption, [citeweb|url=http://www.aip.com.au/pdf/Downstream_Petroleum_2007_Report.pdf|title=Downstream_Petroleum 2007 Report|publisher=Australian Institute of Petroleum|date=15 July 2008|accessdate=2008-09-12] , an iron plant, alumina and nickel processing, port facilities for grain exports, and support industries for mining and petroleum such as heavy and light engineering, and metal fabrication. Shipbuilding (eg Austal Ships) and associated support industries are found at nearby Henderson, just south of Fremantle. Significant secondary industries include cement and building product manufacturing, flour milling, food processing, animal feed production, automotive body building, and printing.

Tourism

In recent years, tourism has grown in importance, with significant numbers of visitors to the state coming from the UK and Ireland (28%), other European countries (14%) Singapore (16%), Japan (10%) and Malaysia (8%). Revenue from tourism is a strong economic driver in many of the smaller population centres outside of Perth, especially in coastal locations.

Performance

Issues

History

Foundation (1829 to 1850)

The British Government founded the Swan River Colony in 1829 with the intention of establishing the colony with an agricultural and pastoral base. The poor quality land - particularly in the region in close proximity of the coast - and an inadequate labour supply and infrastructure hindered the expansion of the economy. [cite web|url=http://www.uwa.edu.au/__data/page/81987/99.05.pdf|title=The Nature Of The Western Australian Economy|author=Ye Qiang|publisher=The University of Western Australia, Department of Economics|accessdate=2006-10-01] .

Convictism and the gold boom (1850 to 1913)

The Swan River colony was not intended to be a penal colony but, in 1848, the introduction of convicts from Britain was sought to provide a labour pool and an income source from the British government. These were to be males, so an immigration program was also funded to redress gender imbalance. Prior to this, population and the economy had stagnated. By 1870 the European population had tripled and was reaching 20 000, around half of these were convicts. This allowed the establishment ofsmaller industries and reduced the reliance on imports. The new labour pool was utilised in new Public Works. The colony began attaining a greater level of financial independence.

The discovery of gold in this period also increased the population. Migration from the eastern states, where a post gold rush economic slump existed, and from overseas increased sharply. While much of the revenue generated was retained by the British crown, some was directed toward creating infrastructure in the state. New towns, Coolgardie and Kalgoorlie, were established at the goldfields and the remote northern town of Roebourne and its port Cossack were boosted by the associated economic boom. The city of Perth and the port of Fremantle, Western Australia were also invigorated by the new economy. Slave labour gave many new industries, such as pearling in the northwest an initial boost.

World Wars and Depression (1913 to 1946)

Post War era (1946 to present)

See also

* Petroleum in Western Australia
* Mining in Western Australia

References