WA budget highlights energy and manufacturing opportunities

The WA State Budget 2025-26, handed down by state treasurer Rita Safioti on 20 June, included A$1.8 billion (approx. US$1.17 billion) in health, hospital and emergency infrastructure, around A$1.5 billion on road projects, A$930 million in spending on regional infrastructure, A$530 million in renewable energy asset construction and A$1.17 billion in community, housing and education infrastructure.

David Ulbrick, an expert in construction and infrastructure at Pinsent Masons, said: “This budget was rushed through following Labor’s March election victory and can be described as steady, not sexy, delivering an operating surplus of A$2.5 billion, the 8^th surplus in a row, although debt levels will continue to rise.”

The budget estimates that WA’s debt will rise from current levels of A$33.5 billion to A$42.4 billion in 2029.

Ulbrick said: “As ever, iron ore royalties will be a major factor in the surplus and that is unlikely to change in the future.”

“While current geopolitical events are changing day by day there are reasons to think that the market for WA’s seaborne iron ore will remain lucrative in the near term and that WA will remain a producer of choice for steel manufacturers the world over,” he said.

“While iron ore will be the staple of the State government’s mining royalties income, we expect that rare earths and other minerals key to renewable projects present in WA will also continue to drive economic growth in the state.”

Training courses for construction workers will be free and the cost of recruiting apprentices and trainees will be subsidised, with $A47 million allocated in the budget for the initiative.

Ulbrick said: “The issue will be whether Western Australia has the workforce to deliver on the State Government’s promises.”

“The competition for talent both domestically and from overseas markets in all professions and trades is likely to remain an ongoing concern for businesses in WA,” he said.

‘To combat that the budget allocates money for work force education through apprenticeships and training.”

The WA government will also expand programs to recruit skill tradespeople from the rest of Australia and New Zealand, alongside covering their relocation costs.

Nicole Whitby, an expert in the infrastructure and energy sector at Pinsent Masons, said: “There is an emphasis on WA-based manufacturing, infrastructure and defence in this budget, which makes sense when considering the longer-term macroeconomic lens.”

“It is reflective of the increased difficulty in transporting energy around the world. As energy costs continue to rise and investors continue to call for companies to meet sustainability targets, we think energy intensive manufacturing processes will gravitate to areas where there where renewable energy is plentiful.  WA is an excellent market in this respect because of its vast reserves of renewable energy and other resources,” she said.

“It is possible that WA will move towards being more of a vertically integrated state in the next 15 to 20 years.  The obvious gateway would be through the manufacture of green steel.  From there we might expect to see other tech-based manufacturing industries emerge in Western Australia like batteries or, at a stretch, silicon chip manufacturing.”