Key points:
- Rocks and royalties drive significant projected budget surplus of $2.4 billion for the 2025-26 financial year.
- CCIWA welcomes government’s renewed focus on industrial development, including energy infrastructure.
- More work is required to create a more competitive tax system and to further streamline environmental approvals.
- No relief for small and medium sized businesses paying the highest payroll tax in the nation.
The Cook Government’s budget for the 2025-26 financial year lays bare the ongoing and heavy reliance on existing industries for the state’s financial strength.
Over the period 2025-26 to 2027-28, iron ore receipts have been revised up $794 million, while gold is up $336 million, delivering windfall royalties to the government.
The Government is putting this fiscal upside to good use, investing in its Made in WA agenda, and pivoting to a new era of infrastructure spend focused on economic assets like ports, energy and water.
CCIWA Chief Economist Aaron Morey says more than 40% of infrastructure spend over the forward estimates will be in these key areas.
“Thank god for rocks and royalties,” he said.
“Existing industries like iron ore and gold are funding the state’s diversification efforts, which will benefit not only WA but the national prosperity enjoyed by all Australians.
“A bit like Taylor Swift, the Government is shifting to a new era of infrastructure spend. We’re moving from the Roads Era to the Industrial Era.”
Key diversification and infrastructure spending measures include:
- A further $500 million into the Strategic Industries Fund established by the Government in 2024 to de-constrain the State’s industrial areas and activate sites for new and emerging industries.
- A $7 billion spend on electricity infrastructure, bolstering the energy transition.
- Initiatives to drive WA manufacturing under the Made in WA plan, including:
- $50 million to build the capacity of the WA battery industry
- $40 million for the New Industries and Innovation Fund
- $30 million for the Investment Attraction Fund
- An additional $349m spend on ports, to grow the state’s export capacity.
- $50m for the Perth Biomedical precinct, a critical part of the state’s diversification agenda.
- $12m to train defence apprentices.
Mr Morey said that without the 2018 GST reforms, WA would only have received 18% of its population share of GST revenue in 2025-26.
“The reforms will instead bring WA up to a share of 75%, which will still be the lowest of all the states. The next lowest state will be Queensland, at 85%,” he said.
“This highlights the inefficiency and inequity of the previous distribution system, which CCIWA looks forward to defending in collaboration with the State Government.”
Mr Morey said a key area of focus for the State Government must be continuing its efforts to streamline environmental approvals.
“While progress has been made, there is still significant scope to make further improvements to achieve an appropriate balance between protecting the environment and maintaining and generating jobs for future generations of Western Australians,” he said.
CCIWA welcomed the budget commitment to boost the Strategic Industries Fund and looks forward to working closely with the government to capitalise on opportunities and ensure any decisions are fit for business.
“This type of investment is critical to opening diversification opportunities,” he said.
“The Government can complement these efforts by relieving the burden of payroll tax and continuing to focus on the streamlining of approvals.”
