WESTERN Australia’s relationship with China, infrastructure and a state sovereign wealth fund were among the big-picture topics addressed by Premier Colin Barnett at last week’s WA Business News Success & Leadership Series Breakfast.
The event provided more than 600 members of the business community an opportunity to ask the premier about his plans for the state should he be re-elected for a second term in 2013.
First and foremost, Mr Barnett stressed the importance of maintaining and building on WA’s close relationship with Asia.
“The WA economy and its people are becoming ever closer to Asia and it’s not just a gradual change, it’s almost a large-scale shift,” Mr Barnett said.
“The fact that WA nearly accounts for half of Australia’s exports means we absolutely dominate the relationship with China and we have leading roles in its relationships with Japan, India, and other nations, and that will accumulate and indeed accelerate.”
Mr Barnett told the audience the WA economy was currently in a period of strong growth, but refrained from using the word ‘boom’.
“The term ‘boom’ does imply a bust, and the reason I say that is that we’ve had periods … where there was a boom mentality around, and it led to excessive expectations,” he said.
“This is a period of very strong growth, and I expect the WA economy to grow at 4 to 6 per cent; we are obviously lucky that we are hitched very tightly to Asia, and that growth of modern China is the economic phenomenon of this century.”
Mr Barnett said the upcoming expiration of infrastructure company Oakajee Port & Rail’s mandate over the Oakajee port proposal would allow the state government to begin discussions with potential participants from overseas.
“What I’ve always wanted to see is an Australia, China and Japan project,” Mr Barnett said.
“The exclusive mandate Oakajee Port & Rail has expires at the end of December; it shouldn’t be seen as a dramatic moment but it does allow the government leeway again to talk more widely to other participants about joining in the project.”
Along with Oakajee, Mr Barnett indicated changes to existing infrastructure in WA were also on the cards.
Should he be re-elected for a second term in 2013, Mr Barnett said he would encourage a merger between generator Verve Energy and retailer Synergy.
He described the 2006 split of Western Power into separate utilities Verve, Western Power, Synergy and Horizon as ‘catastrophic’.
“I think the break up of Western Power was the most catastrophic bungling of public policy in the last 20 years in Western Australia,” Mr Barnett said.
“So we have some repair jobs to do there, not to go back to the past, but to get that energy sector working better … I don’t believe the split of Verve and Synergy serves this state at all so that’s something we are looking at.”
Meanwhile, on the topic of royalties, Mr Barnett said he would consider setting up a sovereign wealth fund for the state.
“In this state there has been a discussion of a sovereign wealth fund,” he said.
“In a sense we’ve got a defacto one at the moment … concessions from iron ore royalties have been used to fund the children’s hospital and have also been used as the first downpayment on the stadium.
“We will continue to do that, but I think the state does have to go beyond those two projects and adopt a more formal future fund.”
