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WA Budget Briefing Note 2021-22

Risks abound amid record revenue

WA Premier Mark McGowan handed down his inaugural Budget as Treasurer today. Key highlights from the 2021-22 State Budget include:

  • A record $5.6bn operating surplus for the general government sector in 2020-21 powered by sky-high iron ore prices during the year
  • Smaller but consistent surpluses over the forward estimates period, including $2.8bn in 2021-22
  • Revenues projected to moderate from 2022-23, with Treasury predicting average prices of US$121.3 a tonne for iron ore in 2021-22 and US$66 a tonne in the remaining forward estimates
  • The State’s record capital investment program rolls on even as revenue is forecast to soften, with cumulative cash deficits for the public sector subsequently forecast, totalling more than $3.2bn over the final three outyears
  • As a result, public sector net debt is forecast to bottom out at $32.1bn by the end of 2021-22, before climbing to $35.6bn by the end of the forward estimates period
  • The State’s Asset Investment Program is forecast to be a record $30.7bn over the forward estimates period. However, timelines for completion of some projects have been stretched over a longer horizon relative to the previous Budget to help ease inflationary pressures
  • The State economy is forecast to grow by 3.25 per cent in 2020-21 - the highest since the end of the mining boom. Treasury expects growth to be slightly stronger at 3.5 per cent in 2021-22, before dropping to average just 1.25 per cent through the Budget outyears as international borders re-open.

Download the State Budget Briefing Note for further analysis and assessment.

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