Magazine of Socialist Action in Australia

Inequality rife in Western Australia

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There has been a lot of commentary in the press about the booming Western Australian (WA) economy. Compared to most other states WA is experiencing higher growth levels, lower unemployment and some of the highest average wages. This is largely a result of the relative strength of the mining sector.

However these facts only tell one side of the story. At the same time inequality in WA is greater than in any other state or territory in Australia. When compared to other advanced countries WA is only beaten in the inequality stakes by the US, Portugal, Turkey and Mexico. For those who are not connected to the mining sector it’s a story of rising cost of living pressures and increasingly insecure forms of work.

Despite indications that the mining boom has peaked, the resource sector is still the main driver of the WA economy. It accounts for about a fifth of the state’s revenues. The Liberal/National State Government has consistently played down the boom in the resource sector, and with good reason.

The ongoing turmoil in Europe continues to have a negative effect on the global economy, especially China, where a ‘managed’ slow down has gone further than the Chinese regime intended. A further slowdown in China will see commodity prices fall.

The early effects of this can already be seen in Australia where mining investment more than halved in the 6 months to April, from over 30% to just 12.5%. With such a significant portion of state funding coming from the resource sector, WA is particularly sensitive to any falls in commodity prices.

The WA State Government is clearly preparing itself for a worsening economic situation. It has started with a 2% across the board cut in the public sector. This comes on the back of a previous cut of 5%. Almost $2 billion in infrastructure projects have been shelved and there have been massive hikes in the cost of utilities.

Since the Liberal/National Government came to power in 2008 electricity prices have risen by over 60%. Gas and other household fuels have gone up by around 70% while rents have increased by over 25%. Education costs have risen by almost 30%. Over the same period the state minimum wage has increased by a mere 9%. This means that the lowest paid have effectively seen their incomes cut.

This deterioration in living standards for the lowest paid has been a trend that has developed over a number of years. Over the last decade both federal and state minimum wage rates have fallen from over 50% of average earnings in WA to just 40% and 41% respectively.

While unemployment in WA is low compared to other states at 3.8%, this is set to start rising. In some areas of WA youth unemployment is already close to 30%.

It is clear that even in the so-called ‘boom state’ of WA the wealth that has been created from mining has not reached the vast bulk of the population. A tiny minority of mining moguls have managed to enrich themselves immensely but many ordinary people have seen their situation go from bad to worse.

It is clear that big business and the major parties are preparing for the slowdown. Ordinary people also need to get organised now to ensure that we are not the ones who are asked to pay for a downturn that is not of our making.

By David Suter


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