WA budget reveals $ 5.6 billion surplus but no date to reopen borders, infrastructure delays

Soaring iron ore prices have fueled Western Australia’s record $ 5.6 billion budget surplus, making it the country’s best-performing economy.

The state is expected to remain in the dark for the next several years, with a surplus of $ 2.8 billion expected this fiscal year.

In his fifth state budget and the first since taking office as treasurer, Premier Mark McGowan said WA had the strongest economy in the country, while other states were inundated with debt and deficits.

“Even in the midst of a global pandemic, unlike any other jurisdiction, Western Australia’s financial condition is strong and sustainable,” he said.

Given the state’s economic position, McGowan said he expected the state-to-state debate to rekindle over sharing the GST.

The budget did not include a forecast for the reopening of the state border.(

ABC News: Eliza Laschon

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The state budget surplus has been significantly boosted by GST revenues.

“They will be madly angry and they will want to defeat the GST deal,” he said.

“We will have to keep fighting for this.”

No date for the reopening of borders

The state budget made no assumptions about when the interstate state border would open, although Mr McGowan previously said he expected it to open to COVID-plagued states like New South Wales and Victoria next year.

An empty airport departure lounge
The budget projects that international travel will resume in September 2022, but it’s unclear when interstate borders will fall.(

ABC News: Hugh Sando

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But he based hypotheses around the international border, with a gradual reopening expected from September 2022.

The Treasury expected the reopening of international borders to slow economic growth, as people took their money abroad to travel.

Many major spending items had already been announced, including $ 1.9 billion for health and mental health, an additional $ 1 billion for the state’s response to COVID-19 and $ 875 million for housing social.

An aerial image of the Kwinana Desalination Plant in South Perth.
$ 1.9 billion will be spent to plan the construction of WA’s third desalination plant.(

Provided: Water company

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The new announcements included $ 1.4 billion to be set aside for a new desalination plant, $ 500 million on a “digital capacity fund” to improve cybersecurity and $ 400 million for the relocation of the port of Fremantle to Kwinana.

Infrastructure delays

While the budget includes a $ 30.7 billion infrastructure program over the next four years, the timelines for 16 major projects have been significantly pushed back due to severe labor and skills shortages. .

This will include the one-year postponement of the Thornlie-Cockburn link, the extension of the Yanchep rail, the modernization of the Perth motorway and motorway network and the renovation of the TAFEs in Balga, Armadale and Albany.

Aerial view of the construction of the future Alkimos station, as part of the Yanchep railway extension.
Rail projects under construction in the state have been delayed, such as the Yanchep line.(

Provided: WA government

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Households can expect their fees and charges to increase 1.6%, an increase of about $ 99.36.

The strong financial situation allowed the state government to advance its review of its strict public sector wage policy, which had been capped at $ 1,000.

The current policy for 150,000 public servants was to last another year, but the prime minister said a review would begin next week and a new policy was expected by next year.

The WA government’s record operating surplus is due to soaring iron ore prices, driven by Chinese demand.

In mid-May, the price of iron ore hit a record US $ 235.6 per tonne, about US $ 140 to US $ 150 per tonne above pre-pandemic prices.

Iron ore royalty revenues are expected to decline from their peak of $ 11.3 billion in 2020-21 to $ 9.2 billion in 2021-22.

While net debt has fallen for the third year in a row to $ 32.1 billion, it is expected to rise again from next fiscal year – when it is expected to hit $ 34 billion.


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