Premier Roger Cook said the $1.6 billion cost of the expansion would be diverted to three major hospital upgrades.
The government has come under criticism for the announcement, particularly because approximately $35 million had already been spent on pre-construction works.
In a press conference on Friday, the Premier said the government was disappointed that it had reached the decision to scrap the project.
He said once they went in deeper into examination of the project they recognised a number of significant challenges, particularly around the impact on road and rail infrastructure in the CBD and engineering matters.
“Our existing business events and tourism program is an important part of our government’s strategy to diversify the economy and ensure it remains the strongest in the nation,” Mr Cook said.
“This is an important focus for my government; however, I refuse to compromise on major projects that will deliver better health outcomes for Western Australians.
“We want to expand our major conference capacity, but it needs to occur in a way that delivers value for taxpayers and doesn’t interrupt the impressive forward program of business events activity.”
This week WA Opposition leader, Basil Zempilas, said the cancellation of the convention centre upgrade would result in Perth missing out on conferences valued at more than $180 million annually to the state’s economy.
Mr Zempilas said he supported funding in healthcare but questioned why the state government’s $217 million spend on the Burswood Racetrack and tens of millions of dollars spent on establishing an NRL team were prioritised over the expansion of the Perth Convention & Exhibition Centre.
Convention centres have been proven to have ongoing benefits for cities, states, territories and countries beyond short-term economic gains.
One of the most comprehensive studies – Beyond Tourism Benefits – by the University of Technology, documented broad and long-lasting legacies from conferences such as collaborations leading to industry innovation and scientific breakthroughs, as well as policy development and social change.
It was also determined that conferences can also help attract talent to cities and sectors.