What is the Economic Impact of WA's Record Resources Sector Spending?
Western Australia's resources sector marked an unprecedented achievement in the 2023-24 financial year, channeling a record $150 billion in direct expenditure into the national economy. This considerable injection not only represents a significant 13% increase on the previous financial year but also establishes a historical high point, marking the largest single-year contribution within the last decade.
This impressive performance underscores the enduring strength and depth of WA's resources sector, evidencing its capacity as a key driver of both state and national economic health. The Chamber of Minerals and Energy of Western Australia (CME), in its authoritative annual Economic Contribution Survey, has provided extensive, detailed insight into the sources, recipients, and impacts of this substantial spending.
How Much Did the WA Resources Sector Contribute to the Economy in 2023-24?
Out of the $150 billion total direct economic contribution, an impressive $88.2 billion was expended within Western Australia itself. This amount represents approximately 59% of total sectoral expenditure nationwide, reinforcing WA's pivotal position as Australia's resources powerhouse. Importantly, nearly three in every ten jobs within the state are reliant on resources sector activities, demonstrating the sector's foundational role within the WA employment landscape.
The sector's significance transcends employment alone. Resources-derived revenue accounts for roughly one-third of the WA Government's total general revenue. This enormous fiscal contribution not only underscores the importance of mining and resources to WA's budgetary health but also highlights its role in providing financial stability and essential public services.
Where Did the $150 Billion in Direct Spending Go?
The colossal $150 billion spent by WA's resources sector in FY24 was allocated strategically across multiple critical areas, creating diverse channels of economic flow:
• $19.8 billion was dispersed in wages directly to industry employees, underpinning high standards of living and economic stability.
• $79.3 billion flowed into local businesses, local governments, and critical community initiatives, thus directly benefiting 18,077 businesses and 36,196 contractors.
• $12.7 billion was funnelled into State Government coffers via taxes and royalties, sufficient to cover the total annual salaries of WA's crucial public servants, including police officers, teachers, nurses, and doctors.
• An additional $37.7 billion was directed towards the Federal Government, a sum nearly adequate to cover Australia's total annual Medicare benefits and services.
• Funding supported diverse local councils (101) and nearly 2,000 community organizations, greatly enriching regions and boosting community development.
This broad distribution strengthens the case for resources as integral not just to the economy, but to WA's social fabric, supporting community wellbeing initiatives such as healthcare, education, sports, cultural enhancement, and charitable organizations.
How Has the Resources Sector Impacted Employment and Wages?
WA's resources sector continues to be one of Australia's foremost employers, directly employing 111,000 full-time equivalent (FTE) employees across the country, with support provided for an additional 730,000 jobs nationally—equivalent to approximately 6% of Australia's total employment pool.
Additionally, wage arrangements within the sector have proven especially advantageous to employees. Over the past two years, wages within the resources sector grew by an average of 14%, significantly outpacing Perth's 9.7% inflation rate. As a result, the average resources sector worker now earns approximately 57% higher than the national average salary.
A distinctive characteristic of these wage negotiations has been their realization through direct employer-employee bargaining, without the involvement of union intervention. This independent negotiation process has proven effective in swiftly securing mutually beneficial outcomes for both parties involved.
What Government Revenue Was Generated by the Resources Sector?
Government revenues from WA's resources sector have been substantial. In the 2023-24 period, resources activities funneled $12.7 billion to WA in state taxes and royalties alone. This is a consequential sum, sufficiently covering the entirety of state police, healthcare, education, and other essential public sector salaries.
Federally, the revenue was even higher at $37.7 billion, effectively funding a substantial portion of Commonwealth expenditure, covering virtually the entirety of Medicare funding needs nationally.
What Challenges is the WA Resources Sector Currently Facing?
Despite record WA resources sector spend in 2023-24, the industry is navigating through an extraordinarily challenging climate. Export values have recently fallen by 7.5%, placing severe pressure on profit margins. Additionally, several projects have faced closures, impacted negatively by economic pressures, declining commodity prices, and escalating operational costs.
Industry leaders have warned there's a danger that some sectors within resources are currently "engaged in a battle for survival." This critical statement from CME CEO Rebecca Tomkinson underscores the severity of the challenges, including increasingly complex regulatory frameworks, critical delays in governmental project assessment, and deep uncertainties surrounding proposed environmental reforms.
How Does the Resources Sector Support Local Communities?
A standout feature of WA's resources sector's spending is its consistent commitment to local communities. Nearly 2,000 community organizations and non-profits received direct funding support throughout WA from mining and resource companies.
Specifically, contributions have significantly improved local infrastructure, training and education opportunities, healthcare accessibility, sports programs, and cultural initiatives. Echoing the CME CEO, the sector is widely regarded as "an integral part of the fabric of the State," underscoring resources companies' critical role in enhancing quality of life and fostering broader community development.
What is the Methodology Behind the Economic Contribution Survey?
The figures provided rest upon the comprehensive Economic Contribution Survey conducted annually by CME. In the latest 2023-24 survey, a total of 58 CME member companies participated, collectively representing approximately 90% of WA royalty revenue receipts.
The detailed survey covers specific companies that confidently and accurately report direct expenditure relating to business spending, community support, job creation, and government revenue contributions. This approach emphasizes strong transparency, replicability and accountability, generally considered best-practice within economic surveys of this scale.
What is the Future Outlook for WA's Resources Sector?
Although the 2023-24 annual economic contribution has registered as a historic high-water mark, industry experts including CME CEO Rebecca Tomkinson have cautioned about the challenging times ahead. In her definitive remarks, Tomkinson highlighted, "the tide has now decisively turned," reflecting growing concerns around future viability amidst declining global commodities market insights and volatile market conditions.
However, the massive global energy transition towards renewable resources and electrification could position WA as a leading competitive hub, driving market demand for specific commodities like lithium, cobalt, and rare earth elements essential for battery technology and renewable energy storage. Realizing this potential requires enabling policies, streamlined project approvals, regulatory certainty, and supportive industry environments—elements the CME emphasizes as absolutely critical going forward.
Furthermore, recent mining and finance industry predictions for 2025 suggest that despite current challenges, there are significant opportunities on the horizon for those companies adopting innovative mining investment strategies and technologies. According to the WA resources sector jobs growth report, the industry remains in its seventh consecutive year of employment expansion, showing remarkable resilience despite market fluctuations.
Frequently Asked Questions About WA's Resources Sector
What percentage of Australian employment does the WA resources sector support?
6%
How much higher are resources sector wages compared to the national average?
57%
What percentage of the WA Government's general revenue comes from resources?
One-third
How many local businesses are supported by the resources sector?
18,077
How many community organizations receive support from the resources sector?
1,937
In sum, the record WA resources sector spend in 2023-24 firmly places the sector at the heart of WA's current and future prosperity. By overcoming current hurdles and capitalizing strategically on global transition opportunities, WA retains immense potential in maintaining its national and international prominence as a key resources hub. Many industry specialists are already analyzing Australia's 2024 economic outlook to understand how recent governance challenges and strategic insights might influence the sector's trajectory in the coming years.
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