‘Nation-leading’ WA budget splurge fired by big surplus

Aaron Bunch |

Cost of living relief for families is expected to be a feature of the Western Australian budget.
Cost of living relief for families is expected to be a feature of the Western Australian budget.

Hip-pocket relief, housing, health and industry development have dominated the West Australian budget as the state posts another strong surplus built on resource sector royalties.

Treasurer Rita Saffioti’s first budget on Thursday delivered a $3.2 billion windfall for the current financial year, with a further $2.6 billion surplus projected for 2024-25.

It’s the state’s sixth consecutive operating surplus but $100 million less than predicted as “headwinds” take their toll on its economy, which Ms Saffioti said was the envy of the nation.

“WA’s economy is well placed to continue to lead the nation,” she told reporters.

“Our business confidence is strong … and we have the wealth and a strong set of finance to support us into the future.”

Ore excavation at the Rio Tinto West Angelas iron ore mine
Volatile commodity prices have played a part in a lower than expected budget 2023-24 surplus. (Alan Porritt/AAP PHOTOS)

The government unveiled a $762 million cost-of-living support package that will provide a $400 electricity credit for households and small businesses, along with payments for families with children at school and airfare caps for regional residents.

More than $1 billion has been allotted to boost the housing supply and support homeless services, with stamp duty exemptions increased to help first-home buyers secure properties that cost less than $600,000.

The measure includes $400 million to supply more social housing, $144 million for new housing and $92 million to support homeless services across the state.

A further $1.8 billion will be invested to support industry and grow the economy, with $373 million for the state’s ports, $352 million for outdoor adventure tourism infrastructure and $36 million to slash red tape.

This includes $500 million to expand WA’s industrial areas, with new land sites for emerging industries, $200 million for a new critical mineral advanced processing facility and $472 million to expand the state’s electricity grid and connect more renewable energy.

The financial blueprint will also invest $1.3 billion in education and training and more than $3 billion in the state’s health system.

Net debt is expected to grow to $28.6 billion at the end of the current financial year, $800 million less than forecast, and expand to $40.9 billion across the forward estimates.

WA Treasurer Rita Saffioti
“WA’s economy is well placed to continue to lead the nation,” Rita Saffioti says. (Richard Wainwright/AAP PHOTOS)

Ms Saffioti said volatile commodity prices and the timing of commonwealth payments had caused the 2023-24 surplus to be slightly lower than projected.

WA is expected to stay in the black with operating surpluses between $2.5 and $2.8 billion predicted across the next four years.

Economic growth is forecast to be two per cent in the year ahead and 1.75 per cent in 2023-24.

The Opposition said the Cook government had been gifted a surplus on the back of the resources sector but failed to bring any new ideas to the budget that might translate the state’s wealth into reform.

“This budget just shows that the seven-year-old government is tired and completely out of ideas,” shadow treasurer Neil Thomson said.

“Less than a year away from the next election we see more band-aid measures and an attempt to paper over the cracks of neglect and disinvestment in the services that really matter to West Australians.”

Peak business group the Chamber of Commerce and Industry WA criticised the lack of business payroll tax reform, saying businesses were drowning in rising costs and there was not enough in the budget to address the situation.

the WA budget
WA’s Opposition says the government has been gifted a surplus on the back of the resources sector. (Richard Wainwright/AAP PHOTOS)

The public sector union welcomed the funding for additional youth justice staff but said it was disappointed there was no significant measure to address the under-resourced WA child protection system.

The Chamber of Minerals and Energy of WA said the resource sector had been a key contributor to the state’s finances, with royalties accounting for 26.5 per cent of general government revenue.

The Conservation Council of WA expressed disappointment, saying the budget provided little to mitigate the impacts of climate change on the environment amid increasing WA fossil fuel emissions.

WEST AUSTRALIAN BUDGET FOR 2024/25

* Surplus: $2.6 billion 

* Revenue: $ 46.2 billion

* Expenditure: $ 43.6 billion

* Net debt: $32.7 billion

* GST revenue: $7.3 billion

* Unemployment: 4.0 per cent

* Economic growth: 2.0 per cent.

AAP