WA economy: Blistering rise in government spending as State runs in the middle of the pack

Western Australia’s growth is in the middle of the pack despite a whopping rise in government spending that was greater than anywhere else in the country.

State Final Demand — which measures economic activity but strips out trade — lifted 0.7 per cent in the September quarter, the Australian Bureau of Statistics said on Wednesday.

WA ranked third nationally and was equal with fellow resources giant Queensland.

Household spending rose just 0.1 per cent, while investment by businesses sunk.

It was the public sector which dominated activity in WA, as government payments grew 3.5 per cent over three months, a faster pace than any other State.

Public sector investment — rail, roads, power lines — rocketed more than 9 per cent, also the biggest rise in the country.

The bureau does not break those numbers down further, but the State Government has been touting record spending on infrastructure that was expected to run at more than $12 billion in this financial year.

Metronet has been the flagship, with the price tag for the swag of rail projects surging past $13 billion in the most recent State Budget.

It came amid slow national growth numbers that were lower than most experts had expected, at 0.3 per cent for the quarter.

The data sparked debate about whether government cash splashes were keeping Australia’s economy afloat or sucking air out of the private sector.

“The (national) economy remains two‑speed,” Commonwealth Bank economist Gareth Aird said.

“Economic growth in the private sector has been non‑existent over the past two quarters.

“It is only public spending that has kept GDP growth positive over that period. This is an unusual situation.”