WA Budget 2025: Rita Saffioti promises she’ll keep West Aussies in jobs as Trump’s trade war, Middle East loom

Rita Saffioti has declared the test of her economic success will be jobs, as she unveiled a budget to ready Western Australia’s economy for trade war chaos and Middle East conflict. WA’s economic momentum will slow moderately in the year ahead with State Demand to grow 2.5 per cent, less than half the speed of 2024. But households will open their wallets thanks to falling interest rates; and the unemployment rate will average a remarkably low 3.75 per cent for the next 12 months. Iron ore royalties remain a major cash earner and will deliver $6.6 billion to the Government’s coffers. That’s a decline of $2 billion from this year as the budget assumes a slide in the commodity’s price to $72 per tonne. The Treasurer prepared the documents in the shadow of US President Donald Trump’s trade war and escalating tensions in the Middle East. Both have led to economic growth downgrades across the globe and threaten to play havoc with price pressures. The outlook was changing “day to day”, Ms Saffioti said, as the international environment was “being turned on its head”. She said local jobs would be “front and centre” as attention moves away from the post-pandemic inflation and cost of living surge. Premier Roger Cook added to the cautious tone by saying no State would be immune from economic shocks. “These are not the global conditions anyone would’ve hoped for,” he said. “The impacts are real.” Committee for Economic Development of Australia chief economist Cassandra Winzar also warned that WA’s strength would come under pressure from “extreme volatility” overseas. Treasury’s economic forecasts reflect that uncertainty and warn that the hit on WA will hinge on top export partner China — as a slowdown in steel production in the Asian economy would flow on to local iron ore producers. Yet Treasury boffins are reasonably confident China’s government will step in to shore up their national economy, easing the impact of the trade war on WA. With the offshore outlook hazy, the Mr Cook and Ms Saffioti will roll the dice on a beefed up plan to subsidise local manufacturing through the flagship “Made in WA” program. Cash will be splashed to make power lines, batteries, buses and ferries locally. “Our measure (of success) will be new jobs growth and in particular jobs growth in manufacturing,” Ms Saffioti said. Amid an ongoing worker shortage, Ms Saffioti said WA “absolutely” had a big enough labour force to fill the proposed surge of government-subsidised jobs. She’s also set to binge on borrowing to fund infrastructure — needing almost $5bn in just this year alone to fund a spendathon on energy and water. About $7 billion was promised for power infrastructure, as the government chases an ambitious plan to shut coal by the end of the decade. Credit agency S&P Global maintained WA’s rating as AAA and said the local economy was “performing soundly”. “Solid operating surpluses, along with a debt burden half that of most east-coast states, enable it to manage billions in election promises and cost-of-living relief funded in today’s annual budget,” analyst Martin Foo said. He said the agency was optimistic about commodity prices and expected the State to be resilient to the trade war. “Downside risk may arise if geopolitical tensions precipitate a sharp slowdown in China, which accounts for about 57 per cent of Western Australia’s goods exports,” he said.