Super Tax to cost 100,000 jobs in WA by 2020

Statement by CCI Chief Executive James Pearson

Further pressure is mounting on the Federal Government to scrap its planned resources super tax after new independent research commissioned by CCI shows it will have a devastating impact on the local economy.

The State’s peak business organisation, CCI, commissioned ACIL Tasman to examine what effects the proposed tax will have on all businesses across the State.

CCI is concerned that the taxes will harm the local resources sector, on which almost all WA businesses, directly or indirectly, depend.

The interim report, the first of its kind to examine the economy-wide impacts of the tax, confirms that the RSPT will be bad for business, bad for the economy, and bad for workers.

Rigorous economic modelling was used by ACIL Tasman to determine what would happen to the economy and businesses across the State if projects were delayed or cancelled. It also assessed the impacts of companies deciding to relocate their most efficient operations to more profitable overseas projects.

These impacts will be felt by employers and their workers even before the tax comes into effect in 2012.

The findings paint a disturbing picture of how the WA economy will weaken under an RSPT.

If the tax is introduced in its current form, the research shows the WA economy will be up to $60 billion smaller over the next decade than it otherwise would be. This is equivalent to the mining, construction and utilities sectors shutting down for a year.

It also finds that there will be up to 100,000 fewer jobs, which equates to around nine per cent of the total workforce.

In 2011, one year before the tax is scheduled to start, CCI predicts the RSPT will slash economic growth from a projected 4.25 per cent to as little as 1.7 per cent, costing $4.4 billion and 17,000 jobs.

It will cost the WA economy as much as a further $5.6 billion in 2012 and $6.7 billion in 2013, with 40,000 fewer jobs over these two years.

It makes no sense to introduce new taxes that will hold back WA. CCI calls on the Federal Government to scrap the plan and allow the state to grow to its full potential.