Western Australia’s new leader faces tough turnaround task

Canberra: Western Australia elected a new government in a landslide victory for the Labor party, as voters swept aside a Liberal-National coalition blamed for squandering the state’s once-in-a-century resources boom and racking up record debt.

Labor leader Mark McGowan, 49, replaces 66-year-old Premier Colin Barnett, inheriting a state economy weighed down by the nation’s highest jobless rate and stuttering growth.

“I won’t let you down,” McGowan told supporters on Saturday in his victory speech. “Today, West Australians voted for hope and opportunity over desperation and division.”

Labor, which has pledged to create 50,000 jobs and boost public transport and services, faces a daunting task in turning around the economy of the resources-rich state that’s borne the brunt of a downturn in commodity prices. McGowan has said erasing a debt mountain — forecast to reach A$33.8 billion (Dh93 billion) in June and rise 13 per cent next year — will take decades, and is instead focused on boosting growth that’s plunged from 9.1 per cent to 1.9 per cent in the past five years.

Long period

Labor is projected to win 40 of the 59 seats in the lower house, according to the Australian Broadcasting Corp. (ABC) Barnett’s Liberal party — in office for eight years — is set to take 14 and his junior coalition partner, the Nationals, five, the ABC projected.

“The people wanted a change because of the long period of time that Colin Barnett had been in government,” Federal Finance Minister Mathias Cormann said in an ABC television interview from Perth on Sunday.

Efforts by McGowan, a former navy officer who has been a lawmaker for more than two decades, to reign in debt and reclaim the state’s AAA credit rating will be complicated by his pledge to block the planned sale of a 51 per cent stake in energy provider Western Power.

Labor’s victory also means that mining giants such as BHP Billiton Ltd. and Rio Tinto Group will be spared an increase on lease rental payments levied on iron ore, something the Nationals had been pushing for.

Future uranium projects in Western Australia are in doubt with the election of Labor, which opposes mining of the nuclear fuel in the state. After Barnett’s government in January approved plans to develop the Yeelirrie deposit, McGowan said he’d wait until after the election to decide if uranium projects greenlighted by the coalition would proceed.

Labor has vowed to scrap Barnett’s plan to build the so-called Roe 8 road link in Perth, even though a Cimic Group-led consortium has already won a A$330 million contract to help build it. A sale of Fremantle Port, considered by Barnett, has been ruled out by McGowan.

Infrastructure, defence

The state’s business community pledged to work with the new government to boost infrastructure and defence.

“In particular, business has welcomed WA Labor’s commitment to establish Infrastructure WA and implement a 20-year infrastructure strategy,” Deidre Willmott, chief executive officer of the Chamber of Commerce and Industry of Western Australia, said in a March 12 statement.

While Labor’s majority in the 59-seat lower house is clear, the fate of the Senate won’t be known for days, with vote-counting ongoing.

One Nation leader Pauline Hanson, who is against Muslim immigration, free-trade agreements and privatisation of state-owned assets, campaigned heavily in the state and last month was polling as high as 13 per cent. While she was aiming to gain the balance of power in the upper house, a series of public gaffes and infighting in the final weeks of the campaign damaged the party, which polled less than 5 per cent of first-choice votes in the lower house on Saturday.

Labor’s victory may pressure Prime Minister Malcolm Turnbull, whose own Liberal-National government trails in opinion polls and has struggled to get spending cuts through the federal Senate, where One Nation is among minor parties that hold the balance of power.

Turnbull’s pledge

Saturday’s defeat means the Liberals hold power in just two of the nation’s eight states and territories. The prime minister in a statement on Sunday pledged to work with McGowan.

In a press conference on Sunday, Turnbull said Barnett had overseen “a very effective transition” of the state’s economy. Barnett’s defeat may mark the end of a political career spanning a quarter of a century. During the height of the resources boom in 2010, when unskilled workers were earning A$200,000 salaries and apartment rents in some remote mining towns exceeded those of Manhattan penthouses, the former economist said “China is giving us the ride of our lives.”

That went sour when demand for Western Australia’s iron ore collapsed, leading state Treasurer Mike Nahan to claim last year that the economy had suffered “the greatest hit since the Great Depression.”

“The overwhelming factor was time — it is a phenomena, particularly in Australian politics, that the electorate, the voters, only give a government a certain amount of time,” Barnett said in a speech in Perth.