Premier Roger Cook and Treasurer Rita Saffioti have pivoted from cost-of-living relief to an economic diversification agenda in a no-frills, election commitment-focused State Budget.
Western Australian Treasurer Rita Saffioti has delivered the State Labor Government’s ninth budget which contains an operating surplus of $2.5 billion for 2024-25, enabling the State Government to deliver its recent suite of election commitments.
Coming hot on the heels of the State Election just over a hundred days ago, today’s State Budget contains few surprises and focuses on delivery of promises made earlier this year. The Treasurer has brought forward the timing of the post-election budget to June rather than September to ward off new spending initiatives, outside those previously announced.
After an estimated addition of $5.4 billion of new total public sector debt between 2024-25 and 2025-26, net debt is projected to grow to $42.4 billion by 2028-29 – forecast to be 9.2 per cent of the state’s economy and projected to be lower than all other states as a share of Gross State Product.
Population growth pressures are forecast to stabilise, with an estimated growth of 1.8 per cent in the budget year compared to a booming 2.8 per cent in 2023-24. While pressure remains on housing stock and demand for essential services, the State Government can breathe a little easier with a sub-2 per cent growth figure.
Real State Final Demand Growth is expected to slow down to 2.5 per cent, both from 2024-25 and the previous budget’s prediction for 2025-26. The main contributing factors are that agricultural output is expected to return to normal following a record season, there is little capacity for growth for major exporters who are operating close to capacity, and the gradual return of international travel impacting on net exports.
Iron ore assumptions remain pessimistic with a USD$77.6 average year assumption, mostly in line with Treasury’s long-term assumptions of a USD$72 baseline. In recent years this has tended to result in windfalls come balance time, with last year’s average assumption of USD$75 resulting in an estimated actual of USD$101.4 – and an unsurprising but welcome boost to the state’s bottom line.
The State Government continues to highlight the importance of the GST reforms struck in 2018. With the Productivity Commission set to review the GST arrangement in 2026 and the recent appointment of former Under Treasurer Michael Barnes to lead the state’s response, the State Government is keen to lay out the risk to Western Australia’s surplus if the ‘no-worse-off’ arrangement were to end:
For example, if the GST reforms were removed in 2027-28 (following the end of the review), Western Australia’s GST grant would fall from $9.5 billion to $4.3 billion. This decline would be even greater if the iron ore price is higher than forecast.
This budget has been framed around two influencing factors: Premier Cook’s vision for Western Australia’s future as outlined at the 2025 Election in his Made in WA policy agenda, and recent economic ruptures caused by global instability and conflict.
This framing has crystallised around several budget initiatives that the State Government believes will help shield against future shocks, deliver longer-term economic growth, and help diversify the state’s economy to become more self-sufficient.
The initiatives committed to at the election include a $500 million top-up of the Strategic Industries Fund for common-user infrastructure, $217 million to develop the Perth Entertainment and Sporting Precinct, $50 million for the State’s Local Battery Manufacturing Program, and $25 million for several advanced manufacturing projects around the energy transition in Forrestfield and Picton.
New initiatives not committed to at the election – but which align with the Premier’s core agenda – include $584.3 million for Western Power to progress the Clean Energy Link North project, $204 million for industrial and tourism port upgrades, and $101 million for the Housing Enabling Infrastructure Fund to provide water, wastewater and power infrastructure to support the development of new residential land and housing.
Missing from the budget has been the now-expected electricity credit for Western Australian households. This year, direct electricity support is limited to passing on the remaining $150 credit from the Albanese Federal Government, totalling $177 million.
Instead, cost of living relief takes the form of the State Government’s election commitments including the second round of the Student Assistance Payment, the new one-zone flat fare for public transport, and the State’s revamped Residential Battery Scheme.
The State Government is keen to highlight that the impact of changes in tariffs, fees and charges in 2025-26 on the ‘representative’ household is down 0.8 per cent, driven mainly by the reduction in public transport fares. However, in the absence of continued electricity credits, the stated reduction is unlikely to be felt by households.
The lack of new cost of living relief measures raises the question of whether the State Government believes that the cost-of-living crisis that has dominated politics since the end of the COVID-19 period has now come to an end.
With new initiatives focused almost exclusively on election commitments, what looms large are the initiatives that are yet to come to book. For example, only modest additional funds have been budgeted to enable the multi-billion dollar Westport project.
The highly publicised commitment to investigate options for the future control and operation of the state’s freight rail network sees this budget allocate just $8.3 million over the next two years to investigate and analyse commercial options.
There is also the question of who will pick up what part of the bill for the additional 4,000 kilometres of new transmission lines that the South West Interconnected System Demand Assessment estimated Western Australia will need over the next 20 years.
With regards to METRONET, industry and the public still wait to see if the State Government will embark on any new phases. Also absent is any form of tax or economic reform, beyond duty relief for first home buyers and off the plan apartment purchasers.
Set against a backdrop of debt rising beyond the projections of the former Barnett State Government, these outstanding items raise the question of whether the State Government will need to make some difficult decisions or be willing to tolerate a level of debt closer to other state governments.
Since the March 2025 State Election we’ve seen a significant Cabinet reshuffle, rebadging of portfolios, machinery of government changes and new departmental leadership. Together with today’s State Budget, the focus now turns to the crucial elements of delivery and implementation of the State Government’s agenda.
Premier Roger Cook has clearly put his stamp on the State Budget early in the State Government’s third term with his economic diversification and Made in WA agenda a key focus.
The 2025-26 State Budget is a steady budget without any grand new spending initiatives, economic reform or dramatic cuts. Rather, it is a plan to deliver election commitments, address key community challenges such as housing and provide a boost to economic resilience.
With the next state election just under four years away, Treasurer Saffioti has called time on energy rebates for households. While inflation has cooled, cost of living remains a key concern for many in the community and the State Government appears to be delivering a more nuanced approach to the issue.
Reach out to our Western Australian team if you would like to discuss the new Western Australian Budget and what it means for you.
Bruce Campbell-Fraser, Partner and Perth Office Head, SEC Newgate Communications – [email protected]
Joey Armenti, Senior Adviser, SEC Newgate Communications – [email protected]
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