PERTH, June 19, 2025
Western Australia is flush with cash, announcing a $2.4 billion surplus for the upcoming financial year,marking its seventh consecutive year in the black.
While the state’s economy remains robust, some cost-of-living measures are being scaled back.
- WA is enjoying its seventh consecutive budget surplus, fueled by strong iron ore prices and GST revenue.
- The government is scrapping electricity bill rebates despite a housing crisis.
- The budget allocates significant funds to housing, infrastructure, and economic diversification.
So, what’s the big news out of Western Australia? The state’s budget reveals a healthy surplus, but the government is also making some tough choices regarding cost-of-living measures.The surplus is largely due to strong iron ore prices and significant GST revenue.
Power Credits and Housing Woes
The state’s financial success,however,masks some underlying challenges.
Despite the financial health, the government is ending its $400 electricity bill rebates for households. This decision comes amidst a pressing housing crisis.
West Australians’ power bills are set to rise after the electricity credit was axed this year.
Budget Breakdown: A Closer Look
Treasurer Rita Saffioti, delivering the Cook government’s first budget since re-election, emphasized the state’s economic strength. The budget focuses on election commitments and previously announced initiatives.
Key allocations include:
- $1.4 billion to increase housing supply, including a shared equity scheme and loans for modular homes.
- Flat fares for public transport.
- $485 million to widen the Kwinana Freeway and upgrade roads in Perth’s south.
- $113 million for roads in Perth’s north, including upgrades to the Erindale Road and Reid Highway interchange.
- $543 million to upgrade CY O’Connor’s 122-year-old water pipeline to Kalgoorlie.
Household costs are projected to rise by 2.5 percent this year, which is less than inflation. The government is focusing on increasing housing supply to ease rental prices.
Roger Cook and Rita Saffioti say this year’s budget positions the state to respond to global instability.
Economic Headwinds and Future Plans
Both Premier Roger Cook and Treasurer Saffioti acknowledged potential economic challenges due to global instability and China’s economic outlook.
“This budget is about fortifying WA amid global shocks,”
she said.
The state aims to diversify its economy and become a “renewables powerhouse.” A total of $2.7 billion has been allocated to support future growth and reduce reliance on economies like China.
the creation of new housing is a major focus of this year’s budget.
This includes $1.4 billion for the ‘Made in WA’ programme, intended to boost local manufacturing and create jobs. Electric buses and ferries, along with solar batteries, will be built in WA.
Diving Deeper: The Housing Crisis and “Made in WA”
the Western Australia housing crisis is a complex issue, and the recent budget reflects this reality. While the government has allocated significant funds to address the housing shortage, the decision to cut electricity bill rebates adds another layer of complexity. The budget proposes a multi-pronged approach, aiming to increase housing supply and stimulate economic growth. These are crucial considerations.
The “Made in WA” program, receiving a substantial $1.4 billion, highlights the government’s commitment to local manufacturing. This strategy is designed to create jobs and diversify the state’s economy, reducing its dependence on volatile global markets. Building electric buses, ferries, and solar batteries locally is a bold move, promising long-term benefits for both the economy and the surroundings.
The Housing Conundrum: Supply, Demand, and Affordability
The core of the issue? There isn’t enough affordable housing. The increasing population combined with slow construction rates resulted in a competitive rental market and soaring house prices. The government aims to address this imbalance with several initiatives, including:
- Shared Equity scheme: This program assists first-home buyers by allowing the government to contribute to the purchase, reducing the initial financial burden.
- Loans for Modular Homes: Modular homes can be built faster and more cost-effectively then customary builds. These loans incentivize the construction of these homes.
- Land Release: Increasing the supply of available land is also essential to create new housing options.
These strategies aim to make homeownership and renting more accessible. However, the success of these policies will depend on their efficient execution and how well they adapt to changing market conditions. It remains to be seen how the recent cuts to electricity credits will affect those struggling with existing costs.
“Made in WA” – Beyond Buses and Batteries
The “Made in WA” program extends beyond simply building electric vehicles. It aims to foster a robust local manufacturing industry with wide-ranging benefits. The goal is a more resilient and also self-sufficient economy. This includes:
- Job Creation: Manufacturing creates skilled jobs across various sectors, boosting the local employment market.
- Skills Progress: Encouraging local manufacturing fosters learning opportunities and improves the skill base of Western Australia.
- Economic Diversification: Reducing reliance on iron ore exports creates a more stable and broader based economy prepared for unexpected economic events.
Building the electric buses and ferries, as well as the initiative to create solar batteries are also important for the shift towards renewable energy. This will lower carbon emissions in the state and also aid in the push for net zero.
The budget involves arduous trade-offs. Here’s a simplified view of the main arguments:
| Pros | Cons |
|---|---|
| Surplus funds: Investments in vital infrastructure and future-proofing the economy. | Cost-of-living pressures: Electricity rebates being removed will hit low-income families hard. |
| Job growth: The “Made in WA” program stimulating job creation and diversification. | Housing supply: Challenges remain unaddressed, and construction timelines might not meet current needs. |
| Long-term investment: Focus on renewable energy and lasting infrastructure. | External economic factors remain uncertain: Global commodity prices and China’s economic output poses risks. |
The budget’s effectiveness hinges on the government’s ability to balance these competing priorities effectively. The housing crisis, coupled with the scrapping of electricity rebates, presents immediate challenges. Together, the government is striving toward a more diverse and sustainable economic future.
Frequently Asked Questions
What is a shared equity scheme? A shared equity scheme is one where the government helps first-time buyers afford their homes by contributing to the purchase price in exchange for a share of the property’s future value.
how will “Made in WA” create jobs? By boosting local manufacturing, the initiative will increase demand for skilled workers in various sectors, including engineering, construction, and renewable energy.
Why did the government cut electricity bill rebates if the state has a surplus? The government is trying to balance providing cost of living relief with investing in long term initiatives such as housing and infrastructure, while managing a fluctuating economy dependent on markets outside of its full control.
What are the risks of relying on iron ore exports? Reliance on a single commodity like iron ore makes the state’s budget vulnerable to global price fluctuations and also shifts in international demand, particularly from trade partners like China.
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