Not every government that builds a strong fiscal position knows what to do with it. Even fewer are afforded the required time. The Cook Labor Government, delivering its tenth budget since returning to office, has shown that it does.

Treasurer Rita Saffioti handed down the 2026-27 WA Budget with a theme of resilience, in order to build on the state’s capacity to absorb global shocks and shape economic growth. Eight consecutive operating surpluses, focussed infrastructure investment across successive budget cycles, and a willingness to hold a course through cost-of-living pressures have produced a state that is strong enough to face the economic volatility and conflict that is rattling the globe.

Western Australia’s eighth consecutive operating surplus comes in at $3.5 billion for 2025-26, with $2.4 billion forecast in 2026-27 and surpluses maintained across the forward estimates. Net debt, presently at 7.1 per cent of GSP, compares to an average of 19.2 per cent across the other states. WA is the only jurisdiction in the country with a triple-A credit rating from both major rating agencies.

Downpayments for future resilience

The $1.4 billion Clean Energy Fund, with stage 1 of Clean Energy Link East declared a priority project, is expected to deliver 3 gigawatts of renewable energy and 800 local jobs. A $44.3 billion asset investment program across the forward estimates. More than $15 billion in water, energy and port infrastructure. $659 million for WA’s share of the Dampier seawater desalination plant. A $150 million Kalgoorlie Vanadium Battery Energy Storage System. $973 million to expand and maintain the Western Power network.

These infrastructure investments position WA to be materially more capable in 2029 than it is today, and more prepared for external shocks.

Insuring our future

There was a choice available to this government in the construction of this budget – sugar hit or insurance for our future. They have prudently taken a middle path.

The consequences from the Middle East conflict and the fuel price shock that followed have upended the assumptions on which last year’s budget was built. The IMF has since revised global economic growth downwards and inflation upwards. Fuel, airfares, fertiliser and construction materials have all increased due to these headwinds.

Some may criticise the $100 fuel support payment to every WA driver’s licence holder, the third consecutive Student Assistance Payment and household charges held below inflation for a seventh consecutive year as inflationary. However, at just over $1 billion, this cost-of-living package pales by comparison to the increased expenditure on infrastructure, health and housing.

The WA Government has used the global context to justify moderate cost-of-living relief, while preserving the fiscal position that makes sustained action possible. A government that spent its surplus on a sugar hit in 2026 would have less capacity to absorb the next shock. The global environment described in the Treasurer’s speech makes clear that the next shock is not a distant prospect.

A signal to the market

The most important investment logic in this budget is not in any individual line item. It is in the common signal across all of them.

More than 85 per cent of WA’s economic growth is being driven by the private sector. Business investment grew 5.7 per cent in 2025 and is projected to grow 6.75 per cent this year. Dwelling investment is forecast at 9.5 per cent, representing the strongest in twelve years. The government’s role in this budget is not to substitute for private investment but to create the conditions in which it continues to flow.

The $1.4 billion Clean Energy Fund and Clean Energy Link East are not examples of bulky government ownership. They are the underwriting and transmission infrastructure that allows private wind, solar and battery storage developers to make viable investment cases in the Wheatbelt, Mid West and South West. The signal to the private market precedes the private investment.

The same logic runs through the strategic industries investments. The $92 million from the Strategic Industries Fund activating Kemerton and Boodarie. The $113 million in industrial land releases at Karratha, Neerabup, Rockingham and Newman. The designation of the Western Trade Coast as WA’s first-ever State Development Area, envisioned to be a precinct forecast to contribute $20 billion annually and support 43,000 jobs.  The $153 million in loans for manufacturers to invest in energy efficiency and advanced manufacturing capability under the Made in WA Energy Affordability Investment Program.

None of these announcements makes green iron or green steel or industrial decarbonisation happen by itself. What they do is make those things bankable. They change the risk settings for proponents attempting to induce capital to WA.

Housing follows the same signal. The $522 million to unlock land through water and energy infrastructure creates capacity for 64,000 lots, with the government creating the preconditions for the private construction sector to invest. The $48 million Housing and Infrastructure Advanced Manufacturing Facilities at Kwinana and Neerabup extends this logic further, to ensure building inputs can be built at scale.

Shelter in future storms

The Middle East conflict has exposed the fragility of supply chains that a distant, trade-exposed state like WA depends on.

WA’s position in that environment is unusual. The state accounts for more than 45 per cent Australia’s exports, driven by the same commodities whose supply chains are under pressure globally. Iron ore, lithium and gas are what makes the rest of the world anxious about supply chains, while they tend to make WA’s fiscal position stronger.

The question is what WA does with that advantage. This Budget’s answer is to invest in transmission, water security, industrial corridors and advanced manufacturing capabilities. This is a decision that the state can use its current fiscal strength to buy into the industries that will define the next decade’s economy. Green iron, green ammonia and industrial decarbonisation are the downstream answer to the question of what WA produces when the world it currently sells to starts buying less of what it currently sells.

The wash up

For proponents bringing projects to market in WA, this budget confirms a signal that has been building across several cycles. The government is building the platforms and expects private capital to stack on top. Projects that fit the jobs, housing and decarbonisation priorities will find receptive ministers, an accelerating approvals framework and an investment environment shaped by a government that has maintained its fiscal capacity over a decade precisely in order to deploy it.

ReGen Strategic works with proponents on positioning their projects to align with the WA Government’s investment and approvals framework. We work at the heart of the energy transition, across renewable energy, critical minerals, industrial decarbonisation, housing and major development. If you are reading this budget and working through what it means for your project pipeline, we welcome the conversation.