Power bill help ditched in WA Labor’s big-spending infrastructure budget

The Cook government has done away with its flagship cost of living-beating $400 power credit as it seeks to convince those not feeling the benefits of the state’s current prosperity that more targeted measures will do the trick.

Labor’s ninth budget – Treasurer Rita Saffioti’s second – has delivered a $2.5 billion operating surplus this year and more operating surpluses over the next four years from $2.4 billion in 2025-26 to $2.8 billion by 2029.

However, state spending continues to skyrocket and cash deficits are driving growth in state debt as the government pivots from road and Metronet spending to ports, poles and wires.

Premier Roger Cook said the budget delivered on his “Made in WA” plan promised at the state election in March, which aimed to diversify WA’s economy away from its reliance on iron ore.

“This budget keeps Western Australian ambitions on track,” he said.

The government will spend $963 million extra on cost of living support for WA households – but that will not include a state-funded power credit that has featured in the past four budgets.

Instead, Saffioti pointed to items like the $150 Commonwealth-funded power credit and the already announced $337 million residential battery scheme as evidence it was helping address power bill prices.

On broader cost of living support, Saffioti pointed to the $89 million school assistance payment currently on offer to parents of school children, and the $2.80 flat Transperth and TransWA fare due next year, which will cost $152 million.

This flat fare has helped bring down how much the average household pays in government fees and charges by 0.8 per cent from $6617 to $6565.

However, power and water bills have risen 2.5 per cent from $3770 to $3864.

Saffioti defended seemingly claiming the Commonwealth power credit as the WA government’s own in her budget.

“We are very proud the Commonwealth is putting forward the $150 credit, and we are passing that through,” she said.

She also revealed $93 million more would be spent on raising the Energy Assistance Payment to $343 for 330,000 households.

Saffioti said that housing affordability was also key to driving down cost of living in the state and said the government’s extra $1.4 billion on housing supply initiatives would drive down house and rent prices.

“Housing affordability is a key part of that discussion, that’s why our effort has been so much investing in new supply,” she said.

The budget was delivered with a warning about global uncertainty, with Saffioti flagging war in the Middle East and Ukraine, coupled with US tariffs and their impact on the Chinese economy, as reasons the state was sailing through turbulent economic waters.

“A decline in US demand for Chinese steel-intensive goods – due to higher tariffs – could weigh on China’s steel output and, in turn, reduce demand for Western Australian iron ore,” the budget warned.

WA’s net debt is expected to jump from $33.5 billion this financial year to $39 billion next year and $42.4 billion by 2029.

This is being driven by huge government spending which has jumped from $41 billion in 20234 to $47.8 billion next year.

Despite the state’s Metronet spending falling as projects come online, Labor’s spending on infrastructure is still hovering around $12 billion next financial year thanks to its $38 billion four-year asset investment program.

This includes projects like the $584 million Clean Energy link to connect renewable energy projects to the South West Power Grid and the $540 million for the Goldfields water supply project.

There will also be huge boosts in education spending with $1.8 billion and health with $1.4 billion.

Iron ore and stamp duty continue to be a big contributor to the state’s coffers with a further $447 million more in royalty revenue expected to come from the sector compared to estimates in February.

This took the state’s total iron ore royalty revenue to $8.5 billion this financial year.

The state’s economy is humming, with the state final demand hitting 3.25 per cent.

Real gross state product, which measures the value of WA exports, only grew 0.5 per cent, which Saffioti said was related to weather events in the state’s north.

Shadow treasurer Sandra Brewer criticised the government’s lack of financial discipline.
“Despite promising to pay down debt ‘like a mortgage,’ and years of record revenue, debt is now projected to hit $42.5 billion within four years,’ Ms Brewer said.

“That’s an almost $9 billion increase in the middle of a once-in-a-lifetime boom.

“Blowing surplus after surplus while leaving the burden for future generations is financial mismanagement.”

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