The State has no money of its own

On Tuesday 29 September, while many Western Australians were still reeling from the Dockers' heartbreaking Grand Final loss, the Cook Labor Government slipped out its Annual Report on State Finances for 2025–26, after the 28 September deadline had passed. Governments usually rush out good news.

It is no mystery why they dragged their feet on this one.

The audited numbers lay bare the warnings I delivered to Parliament in my Budget-in-Reply speech in June. While households struggle to manage their finances, this government has treated record mining royalties and GST windfalls like an open chequebook. Instead of using the good times to pay down debt, it used them as an excuse to spend more. Net debt rose by more than $3 billion in a single year to $33.4 billion. That happened in the same year the government booked a $4.2 billion surplus. Total public sector liabilities are approaching $58.7 billion.

Every week around the kitchen table, ordinary Western Australians make the hard choices required to live within their means. Not so for governments, and certainly not for the Cook Labor Government.

One of my favourite thinkers on the state and economics is the 19th-century French classical liberal Frédéric Bastiat. He described the state as"the great fiction through which everyone endeavours to live at the expense of everyone else."

Many people forget that the government has no money of its own.

Every dollar a politician spends must first be taken from your pocket. It comes through taxes today, through borrowing that becomes taxes tomorrow, or through the cruel, indirect tax of inflation.

Bastiat also taught us to look at what is seen and what is not seen. The ribbon-cutting is seen. What is not seen is the home not built, the business not started, the savings that never grew because that money was taxed or borrowed away.

Those losses are just as real.

When governments pour borrowed and windfall money into an economy already running hot, without increasing the supply of homes, goods and services, more dollars chase the same things. Prices rise, your dollar buys less, and working families are left worse off.

With WA inflation running between 4% and 5.5%, a worker on $100,000 whose pay doesn't keep pace loses $4,000 to $5,000 in purchasing power each year. The government's answer was a token $100 fuel support payment.

It was an insult, swallowed up by inflation in about a week and a half.

During our mining and GST windfall, the State had a historic opportunity to retire low-interest debt, and it squandered it. Those cheap borrowings are now maturing and being refinanced at rates above 5.5%.

Interest on State borrowings alone will surge from $856 million in 2025–26 to $1.42 billion by 2029–30. Across the total public sector, the annual interest bill will reach $3.35 billion by 2029–30. That is roughly equal to the State's entire new investment in housing and almost all of its additional education funding combined.

That money will not build hospitals, repair roads or reduce waiting lists. It will flow to bondholders and financial institutions, funded by your taxes. 

Every dollar the government borrows also competes with families, small businesses and homebuyers for the same pool of capital, putting upward pressure on the cost of borrowing for everyone.

When capital is allocated by political vanity rather than sound economics, basic services wither while mega-projects spiral out of control.

METRONET has blown out from $3 billion to over $13 billion, cannibalising civil contractors and driving construction costs through the roof. The government now wants to plough ahead with Westport before detailed design is complete. That risks competing for labour and resources with the critical $25 billion Henderson AUKUS defence precinct.

During its eight years in office, the Liberal-National Government delivered three major new public hospitals. Nearly a decade and unprecedented mining revenues later, Western Australians are still waiting for Labor's. Ramping is routine, the new Women and Babies Hospital remains years away, and Mandurah's new hospital is still under construction.

In Newman, taxpayers funded a modern hospital, yet local mothers must still travel hundreds of kilometres to Port Hedland or Perth to give birth.

Real wealth comes from productive businesses, skilled workers, investment and saving, not government spending announcements. Western Australians understand this instinctively because they live it every day.

Around kitchen tables across our state, families make difficult choices, pay their bills and plan for the future within their means.

They deserve a government that does the same.