Western Australia (commonly abbreviated as WA^[a]) 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,^[b] the Northern Territory to the north-east and South Australia to the south-east. Western Australia is Australia's largest state and the second-largest subnational entity in the world. The state has approximately 2.3 million inhabitants (around 10% of the national total), the majority of whom live in the south-west corner of the state.

The first European to visit Western Australia was the Dutch explorer Dirk Hartog, who visited the Western Australian coast in 1616. The British established a military outpost at King George Sound, near present-day Albany, in 1826, which was followed by the establishment of the Swan River Colony in 1829, including the townsite of the present-day capital, Perth.

Western Australia achieved self-government in 1890, and later federated with the other British colonies in Australia in 1901. Today Western Australia's economy mainly relies on mining, agriculture, and tourism, with the state supplying 46% of Australia's exports.^[3] Western Australia is the third-largest iron ore producer in the world.

 

 

Western Australia's economy is largely driven by extraction and processing of a diverse range of mineral and petroleum 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:

• Western Australia contributes an estimated 58% of Australia's Mineral and Energy Exports.^[16] Potentially earning up to 4.64% of Australia's total GDP.^[17]
• Gross state product per person ($70,009) is higher than any other state and well above the national average ($54,606)
• 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 to some extent.
• 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 China (iron-ore) and Japan (for LNG), has ensured economic growth above the national average.

Western Australia's overseas exports accounted for 46% of the nation's total. The state's major export commodities include iron-ore, alumina, nickel, gold, ammonia, wheat, wool, live sheep and cattle, and crude oil and liquefied natural gas (LNG).

Western Australia is a major extractor of bauxite, which is also processed into alumina at four refineries providing more than 20% of total world production. It is the world's third-largest iron-ore producer (15% of the world's total) and extracts 75% of Australia's 240 tonnes of gold. Diamonds are extracted at Argyle diamond mine in far north of the Kimberley region. Coal mined at Collie is the main fuel for baseload electricity generation in the state's south-west.

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.^[21] and providing $1.7 billion in export income.^[22]

Other significant farm output includes barley, peas, wool, lamb and beef. There is a high level of overseas demand 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.

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, and high rental prices continue to be a problem.

Located south of Perth, the heavy industrial area of Kwinana has the nation's largest oil refinery which produces petrol and diesel for local consumption,^[along with iron, alumina, and nickel processing plants, 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, 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.

In recent years, tourism has grown in importance, with significant numbers of visitors to the state coming from the UK and Ireland (28%), other European countries (14%) Singapore (16%), Japan (10%) and Malaysia (8%).^[22] Revenue from tourism is a strong economic driver in many of the smaller population centres outside of Perth, especially in coastal locations.

Western Australia has a significant fishing industry. Products for local consumption and export include Western Rock Lobsters, prawns, crabs, shark and tuna, as well as pearl fishing in the Kimberley region of the state. Processing is conducted along the west coast. Whaling was a key marine industry but ceased at Albany in 1978.