Short-sighted "popularity-hungry" federal MPs from both sides of politics will handicap WA in the upcoming boom leading to skills shortages, price hikes and cost-of-living increases even worse than last time, a leading economic forecaster says.
Access Economics' latest outlook for the state's economy predicts a "bigger boom involving bigger bucks" for the state – and despite some after-effects it has already started, according to the forecaster – following on from a "pounding" after the last boom.
It has led to sluggish retail sales, struggling population growth, and historically-high residential and commercial tenancy vacancy rates.
But "the turnaround is already here", the report says.
"Jobs are jumping, businesses are starting to spend more, output growth has already vaulted back above national rates, and inflation is also outpacing its Australia wide equivalent."
However, rising inflation was already a cause for concern, as was the likelihood of another skills shortage.
WA had to find seven out of every eight of the extra workers it needed during the last boom from overseas "because the rest of Australia couldn't be coaxed across the Nullarbor", the report says.
"But this time our short-sighted and popularity hungry national leaders have adopted a bipartisan approach to handicapping the West by cutting back on what was its best buffer last time – international migration.
"And if there will be fewer people arriving to help fill the yawning skill shortages soon to be apparent in the state, then Western Australia can expect shortages, delays, cost increases, and price hikes to be all the worse this time around."
Accounting firm KPMG said yesterday that WA employers had increased their use of 457 visa workers more than any other state, with 34 per cent having done so compared with 25 per cent nationally.
The Access report says inflation in WA was expected to run at between 2.9 per cent and 3.2 per cent for each of the next four years, leaving the state only behind Queensland and South Australia in increases in the cost of living.
But the forecaster expected demand to continue to surge, with WA's share of the national economy expected to grow 0.7 of a percentage point, to 14 per cent, by 2014-15.
That would see WA become a $200 billion a year economy, in today's dollars.
Private consumption would grow between 3 per cent and 4 per cent a year, reaching almost $80b in four years time.
Average weekly earnings were predicted to grow between 4.2 per cent and 5 per cent annually, to reach $1320 a week in four years' time.
However, the housing sector was expected to continue to remain weak, with the amount of loans falling, rental vacancy rates rising, and recent construction just keeping up with demand.
While housing investment was predicted to grow 12 per cent next year, it would actually fall in 2013-14 before recovering slightly the following year.
The unemployment rate was expected to fall to 4.2 per cent in 2011-12, before climbing to 5 per cent three years later.
