Iron ore and charged-up housing market adds even more cash to state coffers
Western Australia’s budget surplus has cracked $3 billion, according to the latest projections from state Treasury.
WA was expected to record a $2.2 billion operating surplus in the mid-year review just three months ago but according to Treasury’s 2020-21 pre-election financial projections statement, a better-than-expected iron ore price and heating real estate market will see the surplus hit $3.1 billion.
Iron ore companies helped add to WA’s revised surplus.Credit:Louie Douvis
Under Treasurer Michael Barnes said the better iron ore price had boosted royalty income over expectations and high activity in the real estate market resulted in increased revenue.
Treasury is required to publish the pre-election statement within 10 days of the dissolution of the legislative assembly, which occurred on January 29 ahead of the March 13 election.
The statement also paints a rosier picture for the state’s ballooning debt and operating surpluses over the forward estimates.
Net debt is expected to reach a forecast $40.2 billion by 2024, $1.2 billion lower than forecast in the mid-year review.
The state is expected to record operating surpluses between $1.5 billion to $2.2 billion forecast over the remainder of the forward estimates period.
Mr Barnes said despite the five-day lockdown and increased risk associated with ongoing restrictions to contain COVID-19, WA’s economic outlook was largely unchanged from the mid-year review, though Treasury had revised its unemployment estimates from 7 per cent to 6.5 per cent over 2020-21.
Gross state product was still expected to reach 2 per cent in 2020-21, up from 1.4 per cent last financial year.
Hamish Hastie is WAtoday's business reporter.