Cashed-up WA to post another big budget surplus

Western Australia’s run of big budget surpluses is set to continue, with the state government set to inject $500 million into heavy industrial use to support critical minerals and green hydrogen production.

Treasurer Rita Saffioti will deliver her first budget on Thursday, with some analysts predicting the 2023/24 surplus will fall short of last year’s projected $3.7 billion and drop below $3 billion for 2024/25.

Economist Alan Duncan says WA’s growth had been stronger than other jurisdictions but “headwinds” have taken some polish off the state’s strong economic performance.

These include high prices and the lack of available housing, along with workforce, infrastructure and supply constraints.

“We have been resilient beyond other states … but I do think that it also creates some challenges,” the Bankwest Curtin Economics Centre director told AAP.

“Constraints may prevent us from maxing out on our productive capacity.”

Despite this, Professor Duncan said WA remained in an “enviable” economic position that would allow the government to continue developing the economy and infrastructure while providing relief for the housing crisis and cost-of-living pressures.

A new Strategic Industries Fund will pump half a billion dollars into common-user infrastructure, including roads, power, water and gas connections, The West Australian reported ahead of the budget.

Kwinana will receive a boost of $125 million for new blocks in its industrial precinct and a further $40 million will flow to Karratha in the state’s northwest, the Peel region, the Goldfields and the southwest for industrial development.

A further $36.4 million is earmarked for new measures to cut through green tape and expedite approvals.

Premier Roger Cook said the government was investing to deliver quality jobs in resources and energy.

“Our economic strength and natural resources mean demand is running hot for land to set up major job-creating projects, in both our regions and Perth’s industrial heartland in Kwinana,” Mr Cook told The West Australian.

“It will help to lock in WA’s strong economy for decades to come – a downpayment on our kids’ future.”

The government has already announced billions of dollars in new spending, including cash to improve the health system and ease the housing shortage and cost of living stress.

Ms Saffioti on Wednesday flagged more spending to help families, along with housing initiatives and investment in the health sector but was giving little away.

Treasurer Rita Saffioti is expected to forecast another big surplus for WA in Thursday’s budget. (Richard Wainwright/AAP PHOTOS)

“This budget will see more support for WA households, continue our massive investment into health and housing and of course, investment in jobs of the future and our efforts to diversify and decarbonise our economy,” she said.

Shadow treasurer Neil Thomson said WA was “living through the boom no one feels” and average people hadn’t seen the benefits because the government had the wrong priorities.

“We expect more band-aids tomorrow trying to paper over the neglect and disinvestment in services that really matter,” he said.

The government on Monday outlined an $843 million spend for social and affordable housing and homelessness initiatives to increase supply and support across the state.

But Shelter WA, said rents had continued to soar and the housing crisis was worsening, forcing more people into homelessness.

“After five years of record surpluses and a GST windfall, the government must centre this year’s budget on housing and homelessness,” chief executive Kath Snell said.

WA Council of Social Service chief executive Louise Giolitto said the budget must provide long-term solutions to the skyrocketing cost of living, not just temporary relief.

More than $100 million has been earmarked in the budget to help families with rising living costs, with payments of $250 for secondary school students and $150 for primary and kindergarten students.

WA’s peak business group, the Chamber of Commerce and Industry WA, urged the Cook government to deliver much-needed payroll tax relief to businesses, boost the state’s defence industry and address the housing crisis.