The State Treasurer, Ben Wyatt, handed down his third Budget on 9 May 2019.

This budget comes in the midst of a trade war, weak property markets and stubbornly high spare capacity in the labour market. Despite this, WA Treasury expect to record the first operating surplus in five years, this year.

Highlights:

• For his third budget, the Treasurer has been able to chalk up the first operating surplus in five years, albeit one driven by greater than expected iron ore royalties and GST revenue.

• While positive, spending commitments (including large infrastructure programs such as Metronet) mean the Government is only able to start paying down state debt when the public sector returns to a cash surplus in 2020-21.

• Achieving those surpluses will be made easier in the near term, with high iron ore prices delivering windfall royalty revenue and the new 70% GST floor boosting State coffers to the tune of $4.5bn over four years.  

• Keeping spending under control is key to sustaining surpluses in the future. The Government has forecast average annual expenditure growth of 1.3% over the forward estimates. History suggests this is easier said than done, but the Government is developing a commendable record.

• The Government has doubled down on its investment in major infrastructure, committing to spend $4.2bn on road projects and $3.8bn in public transport over the next four years.

• The fiscal trajectory faces two major risks: an increasingly unpredictable global economic environment, potentially leading to more volatile commodity prices and exchange rates; and a slower recovery from the local economic downturn, resulting in high unemployment and low household demand for a longer period.

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The WA Economic Outlook is a summary of the Deloitte Access Economics Business Outlook publication with a specific focus on the Western Australian economy.

Read our previous editions

WA Budget Briefing Note 2018-19 - May 2018

WA Economic Outlook - April 2018

WA Economic Outlook - December 2017

WA Budget Briefing Note 2017-18 - September 2017

WA Economic Outlook - June 2017

WA Economic Outlook - March 2017

Published: May 2019