Economy of Western Australia
Encyclopedia
Western Australia
Western Australia is a state of Australia, occupying the entire western third of the Australian continent. It is bounded by the Indian Ocean to the north and west, the Great Australian Bight and Indian Ocean to the south, the Northern Territory to the north-east and South Australia to the south-east...
n economy is a state economy dominated by its resources and services sector and largely driven by the export of iron-ore, gold
Gold
Gold is a chemical element with the symbol Au and an atomic number of 79. Gold is a dense, soft, shiny, malleable and ductile metal. Pure gold has a bright yellow color and luster traditionally considered attractive, which it maintains without oxidizing in air or water. Chemically, gold is a...
, liquefied natural gas
Liquefied natural gas
Liquefied natural gas or LNG is natural gas that has been converted temporarily to liquid form for ease of storage or transport....
and agricultural commodities such as wheat
Wheat
Wheat is a cereal grain, originally from the Levant region of the Near East, but now cultivated worldwide. In 2007 world production of wheat was 607 million tons, making it the third most-produced cereal after maize and rice...
. Covering an area of 2.5 million km2, the state is Australia's largest, accounting for almost one-third of the continent. Western Australia is the nation's fourth most populous state, with 2 million inhabitants (10% of the national population).
In 2011, Western Australia's overseas exports represented 43.1% of the nation's total exports. In 2010-11, Western Australia’s gross state product
Gross state product
Gross state product is a measurement of the economic output of a state or province...
was A$193 billion (14.6% of Australia's GDP
Economy of Australia
The economy of Australia is a developed, modern market economy with a GDP of approximately US$1.23 trillion. In 2011, it was the 13th largest national economy by nominal GDP and the 17th largest measured by PPP adjusted GDP, representing about 1.7% of the World economy. Australia was also ranked...
), making it the nation's fourth most productive state with a GSP per capita of $82,653 (compared with the national average of $57,925). If Western Australia were a separate country, it would be among the Top 50 economies in the world by GDP.
Overview
Western Australia's economy is largely driven by extraction and processing of a diverse range of mineral and petroleumPetroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...
commodities. The structure of the economy is closely linked to the abundance of natural resources found in the State, providing a comparative advantage in resource extraction and processing. As a consequence:
- the Western Australian economy is more capital-intensive than all the other states.
- Gross state productGross state productGross state product is a measurement of the economic output of a state or province...
per person ($82,653) is higher than any other state and well above the national average ($57,925). - Diversification (i.e. a greater range of commodities) over the past 15 years has provided a more balanced production base and less reliance on just a few major export markets, insulating the economy from fluctuations in world prices (e.g. high oil and gas prices help sustain export income when prices of other commodities such as alumina and nickel fall)
- There has been strong growth in the services (finance, insurance and property) and construction sector, which have increased their share of economic output.
- Recent growth in global demand for minerals and petroleum, especially in ChinaChinaChinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
(iron-ore) and Japan (for LNG), has ensured economic growth above the national average.
Western Australia's overseas exports accounted for 43.1% of the nation's total. The state's major export commodities include iron-ore, alumina, crude oil
Oil
An oil is any substance that is liquid at ambient temperatures and does not mix with water but may mix with other oils and organic solvents. This general definition includes vegetable oils, volatile essential oils, petrochemical oils, and synthetic oils....
and liquefied natural gas (LNG)
Liquefied natural gas
Liquefied natural gas or LNG is natural gas that has been converted temporarily to liquid form for ease of storage or transport....
, nickel
Nickel
Nickel is a chemical element with the chemical symbol Ni and atomic number 28. It is a silvery-white lustrous metal with a slight golden tinge. Nickel belongs to the transition metals and is hard and ductile...
, gold
Gold
Gold is a chemical element with the symbol Au and an atomic number of 79. Gold is a dense, soft, shiny, malleable and ductile metal. Pure gold has a bright yellow color and luster traditionally considered attractive, which it maintains without oxidizing in air or water. Chemically, gold is a...
, ammonia
Ammonia
Ammonia is a compound of nitrogen and hydrogen with the formula . It is a colourless gas with a characteristic pungent odour. Ammonia contributes significantly to the nutritional needs of terrestrial organisms by serving as a precursor to food and fertilizers. Ammonia, either directly or...
, wheat, wool, and live sheep and cattle. Western Australia has become known as the engine room of the Australian economy.
Resources
Gold
Gold is a chemical element with the symbol Au and an atomic number of 79. Gold is a dense, soft, shiny, malleable and ductile metal. Pure gold has a bright yellow color and luster traditionally considered attractive, which it maintains without oxidizing in air or water. Chemically, gold is a...
. Diamonds are extracted at Argyle diamond mine
Argyle diamond mine
The Argyle Diamond Mine is a diamond mine located in the East Kimberley region in the remote north of Western Australia. Argyle is the largest diamond producer in the world by volume, although due to the low proportion of gem-quality diamonds, is not the leader by value. It is the only known...
in far north of the Kimberley region. Coal
Lignite
Lignite, often referred to as brown coal, or Rosebud coal by Northern Pacific Railroad,is a soft brown fuel with characteristics that put it somewhere between coal and peat...
mined at Collie
Collie, Western Australia
-External links:*...
is the main fuel for baseload electricity generation in the state's south-west. Australia is the world's fifth largest exporter of LNG, most of which is produced by the North West Shelf Venture
North West Shelf Venture
The North West Shelf Venture, situated in the north-west of Western Australia, is Australia's largest resource development project. It involves the extraction of petroleum at offshore production platforms, onshore processing and export of liquefied natural gas, and production of natural gas for...
near Karratha.
Resource sector growth in recent years has resulted in significant labour and skills shortages, leading to recent efforts by the state government to encourage interstate and overseas migration. According to the 2006 census, the median individual income was A$500 per week in Western Australia (compared to A$466 in Australia as a whole). The median family income was A$1246 per week (compared to A$1171 for Australia). Recent growth has also contributed to significant rises in average property values in 2006, although values plateaued in 2007. Perth property prices are still the second highest in Australia behind Sydney
Sydney
Sydney is the most populous city in Australia and the state capital of New South Wales. Sydney is located on Australia's south-east coast of the Tasman Sea. As of June 2010, the greater metropolitan area had an approximate population of 4.6 million people...
, and high rental prices continue to be a problem.
Agriculture
Agricultural production in WA is a major contributor to the state and national economy. Although tending to be highly seasonal, 2006-07 wheat production in WA was nearly 10 million tonnes, accounting for almost half the nation's total. and providing $1.7 billion in export income. Other significant farm output includes barley, peas, wool, lamb and beef. There is a high level of overseas demand for imports of live animals from WA, driven mainly by South East Asia's feedlots and Middle Eastern countries, where cultural and religious traditions and a lack of storage and refrigeration facilities favour live animals over imports of processed meat. Approximately 50% of Australia's live cattle exports come from Western Australia.Wine
Western Australia also has major wine producing regions in the South West located in Margaret River
Margaret River
Margaret River is a river in southwest Western Australia. Although small and unremarkable, it is the eponym of the iconic town and tourist region of Margaret River, famous for its surfing, caves and wine....
, the Great Southern
Great Southern Wine Region
The Great Southern Wine Region in Western Australia's South West is Australia's largest wine region a rectangle 200 kilometres from east to west and over 100 kilometers from north to south...
and the Swan Valley. Several wineries produce wine for local consumption and international export.
Fishing
Western Australia has a significant fishing industry. Products for local consumption and export include Western Rock Lobsters, prawns, crabs, shark and tuna, Processing is conducted along the west coast. Whaling ceased at Albany
Albany, Western Australia
Albany is a port city in the Great Southern region of Western Australia, some 418 km SE of Perth, the state capital. As of 2009, Albany's population was estimated at 33,600, making it the 6th-largest city in the state....
in 1978.
Manufacturing
South of Perth is the heavy industrial area of KwinanaKwinana
Kwinana may refer to:*Town of Kwinana, a Local Government Area in Western Australia*Kwinana Beach, Western Australia, a suburb in Western Australia*Kwinana Freeway, a major road in Western Australia...
. Located here is the nation's largest oil refinery which produces petrol and diesel for local consumption, an iron
Iron
Iron is a chemical element with the symbol Fe and atomic number 26. It is a metal in the first transition series. It is the most common element forming the planet Earth as a whole, forming much of Earth's outer and inner core. It is the fourth most common element in the Earth's crust...
plant, alumina and nickel
Nickel
Nickel is a chemical element with the chemical symbol Ni and atomic number 28. It is a silvery-white lustrous metal with a slight golden tinge. Nickel belongs to the transition metals and is hard and ductile...
processing, port facilities for grain exports, and support industries for mining and petroleum such as heavy and light engineering, and metal fabrication. Shipbuilding (e.g. Austal Ships) and associated support industries are found at nearby Henderson
Henderson, Western Australia
Henderson is a suburb of Perth, Western Australia, located within the City of Cockburn.-History:The suburb of Henderson comprises land resumed by the Commonwealth Government in 1915 for defence purposes. A large naval base was planned by Admiral Sir Reginald Henderson, and the was area sometimes...
, just south of Fremantle. Significant secondary industries include cement and building product manufacturing, flour milling, food processing, animal feed production, automotive body building, and printing.
Tourism
In recent years, tourismTourism in Australia
Tourism is an important industry for the Australian economy. In the financial year 2009/10, the tourism industry represented 2.6% of Australia's GDP at a value of approximately A$34 billion to the national economy. Domestic tourism is a significant part of the tourism industry, and was...
has grown in importance, with significant numbers of visitors to the state coming from the UK and Ireland (27.8%), other European countries (13.6%) Singapore
Singapore
Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...
(16.5%), Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
(10.1%) and Malaysia (8.3%). Revenue from tourism is a strong economic driver in many of the smaller population centres outside of Perth, especially in coastal locations.
Total international visitors to WA is currently increasing above the national average - for the year ending June 2011 there were 720,200 international visitors, a growth of 5.3% for WA compared to a growth of 3.4% nationally. They spent in total A$1.94 billion, up 9.4% from the previous year. against a national average growth rate of 4.3%. In addition, nights stayed by international visitors was up 5.6% (+3.8% nationally), with a 22% increase in international business visitors (121,400 people). The largest spike in international visitors came from Indonesia (+26.4%), USA (+23.0%), New Zealand (+19.9%) and Malaysia (+15.5%). The biggest decreases in visitor numbers to Western Australia by country was Korea (-25.7%), South Africa (-21.1%), Netherlands (-17,9%) and Canada (-14%). .
Overall Western Australia had an estimated 6,000,000 visitors to the State for the year ending June 2011, with 4,274,000 coming from intrastate, 1,026,000 from interstate, and 720,200 from overseas, making Western Australia's tourism industry worth approximately A$4.8 billion in total.
Foundation (1829 to 1850)
The British Government founded the Swan River ColonySwan River Colony
The Swan River Colony was a British settlement established in 1829 on the Swan River, in Western Australia. The name was a pars pro toto for Western Australia. In 1832, the colony was officially renamed Western Australia, when the colony's founding Lieutenant-Governor, Captain James Stirling,...
in 1829 with the intention of establishing the colony with an agricultural and pastoral base. The poor quality land - particularly in the region in close proximity of the coast - and an inadequate labour supply and infrastructure hindered the expansion of the economy.
Convictism and the gold boom (1850 to 1913)
The Swan River colonySwan River Colony
The Swan River Colony was a British settlement established in 1829 on the Swan River, in Western Australia. The name was a pars pro toto for Western Australia. In 1832, the colony was officially renamed Western Australia, when the colony's founding Lieutenant-Governor, Captain James Stirling,...
was not intended to be a penal colony
Penal colony
A penal colony is a settlement used to exile prisoners and separate them from the general populace by placing them in a remote location, often an island or distant colonial territory...
but, in 1848, the introduction of convict
Convict
A convict is "a person found guilty of a crime and sentenced by a court" or "a person serving a sentence in prison", sometimes referred to in slang as simply a "con". Convicts are often called prisoners or inmates. Persons convicted and sentenced to non-custodial sentences often are not termed...
s from Britain
United Kingdom of Great Britain and Ireland
The United Kingdom of Great Britain and Ireland was the formal name of the United Kingdom during the period when what is now the Republic of Ireland formed a part of it....
was sought to provide a labour pool and an income source from the British government. These were to be males, so an immigration
Immigration
Immigration is the act of foreigners passing or coming into a country for the purpose of permanent residence...
program was also funded to redress gender imbalance. Prior to this, population and the economy had stagnated. By 1870 the European population had tripled and was reaching 20 000, around half of these were convicts. This allowed the establishment of
smaller industries and reduced the reliance on imports. The new labour pool was utilised in new Public Works. The colony began attaining a greater level of financial independence.
The discovery of gold in this period also increased the population. Migration from the eastern states, where a post gold rush economic slump existed, and from overseas increased sharply. While much of the revenue generated was retained by the British crown, some was directed toward creating infrastructure in the state. New towns, Coolgardie and Kalgoorlie, were established at the goldfield
Gold mining
Gold mining is the removal of gold from the ground. There are several techniques and processes by which gold may be extracted from the earth.-History:...
s and the remote northern town of Roebourne and its port Cossack
Cossack
Cossacks are a group of predominantly East Slavic people who originally were members of democratic, semi-military communities in what is today Ukraine and Southern Russia inhabiting sparsely populated areas and islands in the lower Dnieper and Don basins and who played an important role in the...
were boosted by the associated economic boom. The city of Perth
Perth, Western Australia
Perth is the capital and largest city of the Australian state of Western Australia and the fourth most populous city in Australia. The Perth metropolitan area has an estimated population of almost 1,700,000....
and the port of Fremantle, Western Australia
Fremantle, Western Australia
Fremantle is a city in Western Australia, located at the mouth of the Swan River. Fremantle Harbour serves as the port of Perth, the state capital. Fremantle was the first area settled by the Swan River colonists in 1829...
were also invigorated by the new economy. Slave labour gave many new industries, such as pearling
Pearling in Western Australia
Pearling in Western Australia existed well before European settlement. Coastal dwelling Aborigines had collected and traded pearl shell as well as trepang and tortoise with fishermen from Sulawesi for possibly hundreds of years. After settlement the Aborigines were used as slave labour in the...
in the northwest an initial boost.
See also
- Australian economyEconomy of AustraliaThe economy of Australia is a developed, modern market economy with a GDP of approximately US$1.23 trillion. In 2011, it was the 13th largest national economy by nominal GDP and the 17th largest measured by PPP adjusted GDP, representing about 1.7% of the World economy. Australia was also ranked...
- Petroleum in Western AustraliaPetroleum in Western AustraliaThe petroleum industry in Western Australia is the largest contributor to Australia's production of most petroleum products. Based largely on development of the reserves of the North West Shelf and other onshore hydrocarbon basins, the industry extracts crude oil, condensate and natural gas from...
- Mining in Western AustraliaMining in Western AustraliaMining in Western Australia, together with the petroleum industry in the state, accountedfor almost 90 per cent of the State’s income from total merchandise exports in 2008-09...
- Timeline of banking in Western AustraliaTimeline of banking in Western AustraliaThe first commercial bank in Western Australia was created eight years after the establishment of the Swan River Colony in 1829.Note: bold entries indicate a locally domiciled operation...