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Parliamentary Questions

Question Without Notice No. 594 asked in the Legislative Council on 16 June 2020 by Hon Peter Collier

Parliament: 40 Session: 1

Answered on

CORONAVIRUS — ECONOMIC RECOVERY

594. Hon PETER COLLIER to the minister representing the Treasurer:

I ask this question on behalf of Hon Dr Steve Thomas, who is away on urgent parliamentary business.

I refer to the government's economic and fiscal update of 28 May 2020, which states that in response to the COVID-19 pandemic, gross state product is predicted to rise by 0.7 per cent in 2019–20 but decline by 3.1 per cent in 2020–21.

(1) What is the estimated change in activity by sector in the Treasury baseline modelling that contributes to the overall estimated decline of 3.1 per cent in 2020–21?

(2) Are any sectors of the Western Australian economy predicted to grow; and, if so, which ones and by how much?

(3) Which sectors of the Western Australian economy are predicted to decline, and by how much each?

(4) If the price of iron ore remains above $US100 a tonne for the rest of 2020, how much additional royalty revenue will the government receive in 2020–21 above —

(a) the 2019–20 budget estimate; and

(b) the 2019 midyear review?

The PRESIDENT: That is a very detailed question, member.

Hon STEPHEN DAWSON replied:

I thank Hon Dr Steve Thomas for some notice of the question. The following answer has been provided to me by the Treasurer.

(1)–(3) The economic and fiscal update did not include a breakdown of the impact on activity by sector. Updated forecasts and information on the impact of COVID-19 by sector will be published in the 2020–21 budget to be released on 8 October 2020.

(4) (a)–(b) Treasury does not publish royalty forecasts on a calendar year basis. A range of factors influence iron ore royalty revenue, including, but not limited to, the exchange rate, sales volumes, premiums and discounts for various ore qualities, and deductions for shipping. However, Treasury does publish a revenue sensitivity for a $US1 a tonne deviation from forecast in the average benchmark 62 per cent Fe iron ore price in the budget year, holding all else constant. These sensitivities assume that the deviation from forecast occurs over a full year.