Gold, iron ore and population swell big state’s coffers
A growing economy, strong commodity prices and a growing population have helped Australia’s richest state maintain its enviable financial position.
In its mid-year budget review, the Western Australian government predicted the state’s finances would be $2.5 billion for 2025/26, down from a $2.4 billion forecast in June.
Finance Minister Rita Saffioti says WA is on track to post its eighth consecutive operating surplus this financial year.
“Despite ongoing global uncertainty, WA’s economy continues to outperform the country,” he said on Thursday.
The domestic economy grew by 3 percent through September, compared with 2.2 percent nationally, while private sector investment accounted for two-thirds of the growth.
“WA has grown by 26.7 per cent in the last five years,” Ms Saffioti said.
“This is the strongest of any other state or territory and stronger than the national average.”
The strong fiscal performance was driven by healthy iron ore and gold prices, higher-than-expected population figures and government spending.
WA’s population growth also continues to outpace the rest of the country; 2.2 percent is expected for 2024-2025, up from 1.9 percent predicted in June.
Key investments in the review include a $1.9 billion boost to healthcare and an additional $435 million in affordable and social housing development.
A further $502 million has been allocated to community services, including $300 million for the WA Stolen Generations Compensation Scheme.
There will be a $110.5 million boost to domestic and family violence services, and $623 million is earmarked for community safety and prison system expansion.
A further $1 million has been allocated for advertising in the ongoing battle over GST apportionment, which is currently being reviewed by the Productivity Commission.
“The focus of the mid-year review has been steady so far, but making sure we fund key priorities such as the health and housing portfolios,” Ms Saffioti said.
The government’s planned infrastructure spending also increased by $3.8 billion to $41.8 billion by mid-2029.
Net debt is expected to rise to $35.7 billion by the end of the current fiscal year, $3.2 billion lower than forecast in June and rising to $42.1 billion, above forecasts going forward.
The review also shows that net debt as of June 30 was $30.1 billion; This is $3.4 billion lower than the $33.5 billion forecast in the 2025/26 budget.
The state is expected to remain in the black over the next four years, with operating surpluses of between $2.9 billion and $3.1 billion, rising to $2.8 billion from $2.4 billion in June.
Economic growth is estimated at 2.25 percent for the current fiscal year, down from 2.5 percent six months ago; A growth of 3 percent is expected in 2026/27 and 2.5 percent in 2027/28.
The Chamber of Commerce and Industry WA welcomed the focus on housing supply.
“The housing crisis is not only hurting families, it’s also affecting businesses and our economy,” said Anthea Wesley, head of policy.
“All strategies will need to be on the table to ensure housing does not become a critical handbrake on the continued growth and diversification of the economy.”
The Chamber of Mines and Energy WA said the resources sector was a significant contributor to the state’s ongoing strong financial performance.
“The reality is that without mining WA would be unrecognizable,” CEO Aaron Morey said.
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