Western Australia has posted a nation-leading $5.7 billion budget surplus, driven by what Premier Mark McGowan describes as one of the strongest economies in the world.

The 2021/22 surplus, lower than some forecasts but higher than the $2.4 billion mid-year estimate, would make other state treasurers “green with envy”, McGowan noted when releasing the budget on Thursday.

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Announcing his government’s 2022/23 outlook, the premier sent a pointed message about economic management just a week out from the federal election.

“It is undoubtedly and unashamedly a Labor Budget. It is in surplus, and pays down Liberal and National debt. Because that’s what Labor governments do,” he said.

McGowan suggested other state governments could learn from WA.

“I suspect they’ll be green with envy. Some of them will look like they’ve swallowed a bumblebee,” he said of his national counterparts.

“All the other states have not run their finances as well as Western Australia.”

The budget windfall is driven by better-than-expected tax receipts, a lift in the iron ore price since the December mid-year budget review, and an increase in the national GST pool.

The state will bring in $41.9 billion in revenue this year, with iron ore royalties ($10.3 billion) and payroll tax ($4.4 billion) the largest contributors.

Here’s how it will impact you

The government will use the healthy budget numbers to fund measures to ease cost-of-living pressures, infrastructure projects and to pay down net debt.

The budget includes $445 million to fund a $400 household electricity subsidy. The credit would begin in July and will not be means-tested, McGowan said.

Amid calls to freeze government fees and charges as inflation surges, the premier said an average household will pay 3.8 per cent less overall during the coming 12 months.

The budget papers assume a CPI increase in the state of 4 per cent for 2021/22, falling to 2.5 per cent by 2023/24.

The pandemic response gets a further $1.6 billion, including $635 million to continue the free rapid antigen test program.

There is a further $2.5 billion for the health system, including a $252 million “reform package” for emergency departments struggling with ambulance ramping.

In a bid to ease acute housing shortages, particularly for renters, build-to-rent developers will be eligible for a 50 per cent land tax concession.

West Australians will receive a $400 household electricity subsidy beginning in July. Credit: Getty Images/iStockphoto

There is also a $505 million in new funding to expand four primary schools and continue works at Alkimos College, and $350 million to set up a Remote Communities Fund, with the WA government hopeful of like-for-like commonwealth contributions.

Net debt will fall below $30 billion, with the resulting drop in interest payments saving the government about $1 billion each year.

The figures come as unemployment falls to a new low of 4 per cent, forecast to fall to 3.75 per cent in 2022/23.

State final demand is also estimated to grow by the strongest rate in a decade - 5.25 per cent 2021/22, falling to 4 per cent in 2022/23 - underpinned by a lift in household spending.

Pointing to combined economic growth of 7.2 per cent since January 2020, McGowan said this vindicates the government’s controversial hard border policy, which lifted on March 5.

“The critics said somehow the state’s closure would mean we’d be a pariah state.”

“They were all wrong,” he saidWA Premier Mark McGowan has revealed a forecast $5.7 billion budget surplus. Credit: AAP

WA Budget breakdown

· Surplus: $1.6 billion ($5.7 billion 2021/22)

· Revenue: $38.4 billion

· Expenditure: $36.8 billion

· Net debt: $31.1 billion

· GST revenue: $5.9 billion

· Unemployment: 3.75 per cent

· Growth: 4 per cent (state final demand)