Pilbara business costs highest in WA

It will come as no surprise to locals that a new study has found that The Cost of Doing Business in the Pilbara is high – but just how high could be a surprise.

The study released on June 19 by Regional Development Australia Pilbara found that between 2007 and 2011 the cost of living and working in the Pilbara was becoming more expensive than in Perth at an average rate of five per cent each year.

The report said this meant that “in 2012 the data showed that in the Pilbara the level of remuneration for employees would need to be a minimum of 37 per cent higher than that in Perth, and that there is often a need to provide subsidised or free accommodation to attract or retain employees”.

Among other costs, private rents were 435 per cent more expensive in the Pilbara than in Perth, education costs were 35 per cent more expensive and interestingly home insurance was 393 per cent more expensive.

McDonalds Big Macs were overpriced by 24 per cent compared to Perth.

“Pilbara costs of doing business are far higher than the rest of WA and most of Australia,” the report stated.

“Although costs will rise more slowly in the next few years (and may fall slightly for some items) the absolute level of costs will remain one of the highest in Australia overall.”

According to the report, the rising costs between 2006 and 2011 had hit businesses and persons engaged in the non-mining sector hardest.

As one example, most other regions of WA had five times as many active businesses per $1bn of gross regional product generated than the Pilbara.

Additionally, the overall increase in household expenditure from 2006 to 2011 was exceptionally high in the Pilbara at 23 per cent, equating to a rise from an average of $94,000 to $116,000.

“Income disparities in the Pilbara are very high and lower income earners such as those in the NGO sector have to cope with high prices on much lower salaries,” the report stated.

For Diane Pentz the chief executive officer of RDAP, the high costs are jeopardising the region’s future.

“We need to concentrate on features that will make the Pilbara attractive beyond resources,” Diane said.

“A resilient future is to build on the strong resources [industry] but not rely on it to meet all our needs.”

“We have to start diversifying and look at what else we have.”

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