
WA Budget 2025: Are WA's growing pains with population, hospitals and housing easing at last?
The end may be in sight for Perth's growing pains, with the State's population growth forecast to drop to half of its peak in the next three years.
But not before the WA Government continues to pick up the tab for the State's heaving hospitals, fuller classrooms and housing crisis, which includes $110 million to tackle record-high emergency department ramping, $135m for new schools and upgrades and $226m for social and affordable housing at a time when 21,060 are on the public housing waitlist.
Those numbers form part of the $4.3b earmarked for health ($1.4b), housing ($1.4b) and education $1.5b) in this year's budget.
WA's population peaked at 3.4 per cent in September 2023, contributing to a surge of 300,000 new West Australians over the past five years.
Services have largely failed to keep pace with the growth, despite WA's seven consecutive operating surpluses.
Perth currently has a shortfall of 7700 rental homes, according to Bankwest Curtin Economics Centre, emergency department ramping had its worst May ever last month and despite completing 20,000 homes in 2024 it still fell 4000 homes short of the National Housing Accord target.
Treasury forecasts show WA's population growth has slowed to 1.9 per cent in 2024-25 and drop further to 1.8 per cent in 2025-26 and then 1.7 per cent for two years before falling to 1.6 per cent in 2028-29.
Handing down the 2025-26 budget, Treasurer Rita Saffioti said the State's economy 'has attracted more people to move to Western Australia than ever before.'
'While this population growth is a vote of confidence in our State, it has also increased demand for services and housing,' she said. 'This budget responds to that demand.'
Among the new schools planning, $400,000 has been allocated for work on a previously-flagged new primary school in Mount Lawley and a proposed new secondary school in Dawesville. The government will also spend $28m to expand the school breakfast program and $10m for school canteens to upgrade or purchase equipment and hire staff.
The emergency departments of St John of God Midland and Royal Perth Hospital are both being expanded, with $5m earmarked for each respectively in 2025-26. The growing population in the Swan and Hills catchment area is expected to see numbers at Midland emergency jump by 38 per cent by 2031-32.
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ABC News
8 hours ago
- ABC News
Workforce shortages the key roadblock to state government's 'Made in WA' future
Economic experts have endorsed the WA government's future-focused budget, but warned a tight labour market could be its biggest roadblock. Thursday's state budget represented a shift in the government's focus, from transport projects and cost-of-living relief to infrastructure spending to kick-start diversification of the state's economy. About 40 per cent of government infrastructure investment over the next four years is earmarked for so-called enabling infrastructure, like electricity transmission and ports. "There's global economic turmoil," Treasurer Rita Saffioti said of the shift in focus. "We need to make sure we protect Western Australia and help Western Australia grow into the future. "We don't want WA to be collateral damage in global economic chaos." Raymond Da Silva Rosa studies what drives corporate investment at the University of Western Australia and backed the government's plans to try and increase productivity across the state. "We have a budget that's in surplus, we have an economy that's booming, we have a state government that has pretty much total control of the political agenda," he said. "So all the pieces are in place for the government to take some considerable risks that other governments can't afford to." One missing piece though, he said, is likely to be workforce — largely because the mining industry remaining successful leaves few workers for other industries. Chief economist for the Committee for the Economic Development of Australia, Cassanda Winzar, agreed. "There's a real argument to be had there for spreading some of the spend out and looking at what the biggest priorities are," she said. "So looking at some of that infrastructure around the energy transition, but also really looking at our housing situation. "If people can't get houses here there's not really going to be much investment and much desire for new industries to grow and develop here in WA." That backing from the private sector will be critical to making the government's vision a reality — because without businesses changing where and how they spend money, the shape of the economy won't change. Saffioti used an address to a business breakfast yesterday to encourage them to back the government's plans. "We're here, ready to work with industry, making sure we can deliver on our commitments," she said. Asked later in the day what would happen if businesses didn't change their spending, the treasurer said the combination of providing initial infrastructure and capital with long-term government purchase agreements was attractive to industry. "I think there's a lot of excitement, and just speaking to a few people today, I think that there's a real willingness," she said. Despite the broad support, Ms Winzar and Professor da Silva Rossa questioned the government's focus on manufacturing as a priority area, beyond a few niche industries. "We're a very high-cost state, labour-wise, in a high-cost country," Ms Winzar said. "Manufacturing across Australia is always going to be challenging. "It's particularly challenging in WA when we've got competing demands for labour from industries such as mining." Professor da Silva Rosa said there were strengths the government should try to leverage, which could be enhanced by boosting the quality of primary and secondary education. "The services sector is the one that dominates, so it's more about high-end services, like medical services, computers and the like, engineering services," he said. For its part, the opposition continues to argue payroll tax is an unnecessary roadblock to economic growth. Payroll tax is paid to the state government by all businesses whose wage bill exceeds $1 million each year, and is expected to bring in $6.2 billion next financial year. "WA businesses face a disincentive when they hire people," Shadow Treasurer Sandra Brewer said. "Our payroll tax, particularly for small businesses, are the highest in the country." She made the case alongside Jay Sidhu, who owns a land surveying business and said the tax had influenced his thinking as demand for his services grew. "Me and my business partners have to consider it before we even think of growing," he said. Ms Brewer said those costs were often passed directly on to customers. "So what we're saying is, the government could help housing affordability by looking at all of the taxes on business, and seeing where they can reform," she said. Asked at the business breakfast if a Labor government was ever likely to consider changes to payroll tax, Ms Saffioti said: "Every budget we consider everything." "But also it's about the approvals process," she said. "So we're working across the breadth of the economy to [see] what we can do in relation to supporting industry and business." Ms Winzar said that was another area which needed to be looked at closely to attract investment to the state. "What often happens in WA is we have really good small businesses and they're looking to expand, and they feel like they can't do it in WA because they don't have access to the right resources, to get the right labour," she said. "The tax and regulation settings don't encourage them to grow here, so they leave either for interstate or overseas. "We really want to encourage all those businesses to stay, to grow here, and other businesses to come setup here."

Sky News AU
13 hours ago
- Sky News AU
‘Net negative': Positive Economics Advisory's David Williams-Chen delivers warning as Labor mulls family trust tax changes
Labor imposing a flat tax rate on family trusts could be a 'net negative' for the economy, an expert has warned after a report arose the government is considering trusts in its raft of tax reforms. Sources told the Australian Financial Review Labor is likely to propose higher taxes on family trusts as Treasury ramps up scrutiny of the tax-friendly investment vehicles in its economic reforms. Many Australian families and businesses use the trusts to protect their assets and split income between beneficiaries to reap the benefits from the lower tax rates. The report follows Labor proposing a minimum 30 per cent tax rate on trusts as part of its failed swath of tax reforms it took to the 2019 election. Positive Economics Advisory's managing director David Williams-Chen said if Labor were to apply a flat tax rate, Aussies would find a way to avoid it. 'People will respond to incentives and we see this time and again,' Mr Williams-Chen told 'Whether it's smokers buying black market tobacco to avoid paying high price cigarettes as excise levies have increased. 'Or whether it's the wealthy who have taken advantage of lower tax settings in superannuation before balance transfer caps and contribution limits came into place. 'We know there'd be a response.' He pointed to research from US academics Shahar Rotberg and Joseph Steinberg where it was found increasing wealth taxes incentivised people to hide their assets and resulted in lower tax revenue. Mr Williams-Chen urged the government to keep in mind taxpayers' capacity to avoid other taxes and even warned this could lead to a situation shown in the work of Rotberg and Steinberg. 'The evidence from the US shows that once the behavioural responses to wealth taxes on capital are factored in, there's a likelihood that they're actually negative for the economy,' he said. 'Rotberg and Steinberg in 2024 found wealth taxes would cause an overall decline in economic welfare between 0.3 and 0.4 percent.' The individuals who are the beneficiaries of a trust pay their personal income tax rate on the distributions. This means the tax paid on a trust can vary from zero per cent to 47 per cent. Labor considering changes to family trusts, alongside plans to tax high earning super accounts and wind back electric vehicle rebates, come as Labor faces a decade of deficits and ballooning costs of the NDIS and defence. The Albanese government also faces reduced tax revenue from lower tobacco excise and falling fossil fuel exports as Australia continues on its renewables shift.

News.com.au
13 hours ago
- News.com.au
Dan Andrews' ‘ghost' home legacy revealed as apartment towers stall
Thousands of Melbourne apartments have been abandoned or heavily delayed in a blow to the Victorian government's hopes to build its way out of a housing crisis. Families who have been waiting years for their next home are now having contracts torn up as the state's development woes worsen. Surging building costs and Daniel Andrews-era policy decisions have combined to turn huge numbers of the state's apartment pipeline into 'phantom approvals', with Victoria now ranked as one of the worst places to build units. Packer's $100m play to live longer Australian Bureau of Statistics data analysis shows one in six apartments approved for construction around the nation have still not been commenced two years later, with experts warning it is significantly worse in Victoria. By contrast more than 95 per cent of houses approved are built, as are similar numbers of townhouses. MCG Quantity Surveyors research shows that home completions in Victoria are on track to reach about 56,000 in 2025, which is 10,000 (15 per cent) below the state's peak of 66,000 in 2017. It is significantly short of the 76,000 annual home build target to meet obligations under the National Housing Accord's 1.2 million home target by 2029, and even worse when contrasted with the state government's own 80,000 homes a year goal for the next decade. MCG Quantity Surveyors director Mike Mortlock said the data showed far fewer homes were being built than officials citing approvals data were claiming. 'We need unit construction to be outperforming targets. The reality is the opposite,' Mr Mortlock said. Their figures show Melbourne's south east has a less than two month supply of new apartments, while there is just over three months' supply headed to the Mornington Peninsula, followed by the city's inner east where there is an about four-month supply of units. Mr Mortlock said there were multiple 'headwinds' to unit construction that were not as prevalent only a few years ago, a key one was that 'governments at all levels have become drunk on property taxes'. Housing Association Industry chief economist Tim Reardon said many of the multi-unit projects approved in Sydney, Melbourne, Brisbane and other big city markets were 'phantom approvals'. 'For apartment building to increase meaningfully, we would need to wait for established units to become so scarce that the prices would catch up with those for new units,' Mr Reardon said. 'It could take years.' He noted that a key contributor to phantom approvals issue was increased taxes on foreign investment into new housing projects, with Daniel Andrews the first premier to increase stamp duty on internationals in 2015. 'These taxes are the goose that killed the golden egg,' Mr Reardon said. 'It's one of the worst housing policy own goals. Removing the taxes would see significant increases in the homes getting built.' A number of major Victorian projects have suffered as a result of international investment taxation as well as rising building costs. Buyers who have splashed as much as $35m on homes in 2022 for what was planned to be Australia's tallest skyscraper, STHBNK By Beulah, are now in limbo after the project manager BSSPV Pty Ltd was placed in voluntary administration in February. While it has since exited administration, the site is still waiting on the outcome of an expressions of interest with developer Beulah International looking to either sell the site or establish a joint venture for its continued development. Aspects of the Malt District redevelopment of the Nylex Clock site in Cremorne also remain undeveloped, years after its developer, Caydon, collapsed. In Alphington, Glenvill's YarraBend stopped sales for a development titled the Glass House as the cost of building soared, and while most buyers took back their deposit in the years that followed the building's launch to sales in 2022, one couple finally had their contract torn up in March this year. 'We stopped sales when we found out where building prices were headed,' said Glenvill sales and marketing director Sam Tucker. Mr Tucker added that the Glass House was being redesigned and going back through council planning and would be included as part of its Boiler House complex, with apartment sizes and formats to be revised – including the removal of most one-bedroom offerings which had become far more difficult to sell with prices touching on $700,000 due to building cost increases. Glenvill have been able to continue with other developments within the wider YarraBend infill project and a separate complex with close to 200 homes is due to reach settlement in the near future. Conveyancer Andrew Curtis worked with a number of buyers affected by the project's cancellation and said he was seeing a rise in the number of people buying off-the-plan apartments only to have their contract rescinded years later. 'The vast majority of developers, you don't run into these sort of problems; and a lot of this was impacted by Covid,' Mr Curtis said. 'But the issue is becoming more common. 'And it is going to get worse. The building costs are still ridiculous and that's still causing a lot of issues for builders in the industry.' In many instances, the conveyancer said stalled or abandoned developments would likely have gone ahead if not for the Daniel Andrews-era policy increase to stamp duty for international investors. 'One of the reasons these projects are running into trouble is that they aren't selling to offshore investors,' Mr Curtis said. Charter Keck Cramer national executive director of research Richard Temlett said building costs had increased by 30-50 per cent, adding hundreds of thousands of dollars to the cost of many projects, with the state's tax regime also a major factor in development woes. 'Rather than tax at 5 per cent and nothing gets built, if they taxed at 2.5 per cent and 10 times the number of homes get built, they would at lease get some revenue,' Mr Temlett said. 'Melbourne is the weakest apartment market right now, because of the loss of overseas revenue. And that's one of the biggest missteps the government has made and we are now seeing it. 'It's all things lingering from the Andrews era.' He noted buyers looking for certainty in the apartment sector could still look for well-funded groups and those with a listing on the Australian Stock Exchange as a way to find groups more likely to be able to proceed with projects in a timely way. Australian Property Development Association president Alex Huang said Victoria had become 'probably one of the worst places that a developer can pick to launch a project'. Over the past year he said he was hearing of contracts being torn up 'more and more frequently', estimating 100s of would have been rescinded, though he was optimistic falling interest rates would help to improve the situation for the sector in the year ahead.