Call him Trent. He has spent nineteen years on the tugs and pilot boats that work Port Hedland harbour, guiding bulk carriers the length of three football fields out through the channel and into open water. On an ordinary day another fully laden ship, bound more often than not for a Chinese steelworks, pulls away from the wharf; in 2024-25 alone, 546 million tonnes of ore left through this one port, three-fifths of everything Western Australia shipped (WA Iron Ore Profile, Jan-2026). Trent is a composite, not one named worker, but the tonnage is real, and so is what it funds: a new hospital wing near his kids' school, a credit on the family's power bill, seven years running of a state government that has not needed to borrow to balance its books. Almost none of it would exist in its current form without a number that scrolls past on a commodity screen most West Australians never look at — the price a Chinese steel mill will pay for a tonne of Pilbara ore.
The scale is genuinely hard to grasp. Iron ore earned Western Australia $119.4 billion in export revenue in the twelve months to November 2025, of which $102.7 billion — 86% — went to China alone (WA Iron Ore Profile, Jan-2026, citing ABS International Trade in Goods and Services). Royalties on that ore, paid by BHP, Rio Tinto, Fortescue and a handful of smaller miners direct to WA Treasury, delivered $8.6 billion to the state budget in 2024-25 and made up 87% of all mining royalty receipts that year, excluding North West Shelf gas grants (WA Iron Ore Profile, Jan-2026). It is this single revenue line, more than any other, that has let Western Australia post an unbroken run of budget surpluses this decade while other states have run deficits.
What the government did
The floor under that run of surpluses was not built by the Cook Government. It was legislated in 2018 by the Commonwealth Parliament, after years of WA lobbying under both the Barnett and McGowan governments: from 2022-23, no state's GST relativity — its share of the national GST pool measured against an equal per-capita split — can fall below 70 cents in the dollar, rising to 75 cents from 2024-25, with a Commonwealth "no worse off" top-up guaranteed to every state until 2029-30 (Commonwealth Grants Commission, 2018 GST distribution legislation). The deal exists because WA's relativity had collapsed to around 30 cents in the dollar in 2015-16 (approx.), as the horizontal fiscal equalisation formula shared GST inversely to a state's revenue capacity, penalising Western Australia using royalty data lagged years behind the price cycle it was measuring.
Roger Cook became Premier in June 2023; his government, with Treasurer Rita Saffioti, has generally managed the resulting money conservatively rather than spending all of it. On the government's own count, the 2023-24 Budget delivered the state's seventh consecutive operating surplus, of $3.2 billion (approx.) (WA Budget Papers, 2023-24). A surplus of $2.4 billion was forecast for 2025-26 at the May 2025 Budget; that estimate was revised to $2.5 billion by December's Mid-Year Review, then to $3.5 billion by the time of the 2026-27 Budget in May 2026 — three different numbers for the same financial year inside twelve months (WA State Budget 2025-26; 2025-26 Mid-Year Financial Projections Statement, Dec-2025; 2026-27 WA State Budget Overview). General government net debt sat at $26.2 billion in 2025-26, just 7.1% of gross state product — the lowest debt-to-GSP ratio of any Australian state — and the government says it is $9 billion lower than it was projected to be when Labor first took office in 2017 (WA Government, 2026-27 Budget Overview, May-2026). Some of the money has gone to direct cost-of-living relief and fee freezes; a larger share has funded infrastructure, including the Metronet rail expansion and new hospitals, largely paid for in cash rather than new borrowing.
The strongest case
A government that broke a genuinely bad debt trajectory and kept its nerve
A fair reading of the record gives Cook Labor real credit here. In February 2018, a state-commissioned Special Inquiry led by former Treasury under secretary John Langoulant found that the preceding Barnett Government's spending, including an over-committed Royalties for Regions program, had put net debt on a path past $40 billion with no credible plan to bring it back down (WA Government, Special Inquiry into Government Programs and Projects, Final Report, Feb-2018). The McGowan and Cook governments that followed did not merely avoid making that worse; government figures show net debt was cut by more than $14 billion within about four years (approx.), and Western Australia is now the only Australian state or territory rated AAA by S&P Global and Aaa by Moody's simultaneously, reinstated in 2022 and 2023 respectively and reaffirmed as recently as May 2026, with Moody's citing "a well entrenched framework of fiscal discipline" (WA Government / Moody's Investors Service, media statement, 28-May-2026). Much of the surplus has also gone to genuinely productive ends — hospitals and Metronet built largely without new debt — rather than recurrent spending a future government would have to unwind. Set against the trajectory the state was on a decade ago, that is a real and creditable turnaround, not simply a fortunate accident of the price cycle.
The evidence
The turnaround is real, but so is what it sits on. Two figures capture the concentration: 87% of WA's mining royalty receipts come from a single commodity, and 86% of that commodity's export value goes to a single country (WA Iron Ore Profile, Jan-2026). Layer the state's own Treasury forecasts over that concentration and a downward slope appears in the government's own numbers, not a critic's worst case.
WA's own Treasury does not dispute the direction of travel. Its Mid-Year Financial Projections Statement, released in December 2025, assumes the average iron ore price will fall from US$100.9 a tonne in 2024-25 to US$96.6 a tonne in 2025-26, then to US$72 a tonne — Treasury's own estimate of the commodity's long-term average — in every year from 2026-27 to 2028-29 (WA Government, 2025-26 Mid-Year Financial Projections Statement, Dec-2025). On that assumption, the 2025-26 State Budget forecasts iron ore royalty income falling from $8.6 billion in 2024-25 to $5.8 billion in 2028-29 — a roughly one-third fall in the state's single largest revenue line, built into the government's own forward estimates rather than a pessimistic outside scenario (WA State Budget 2025-26, cited in WA Iron Ore Profile, Jan-2026).
The concentration is structural as much as it is a matter of price. The Auditor General's 2024 review of the Management of State Agreements — the decades-old legislated contracts that govern how BHP, Rio Tinto and Fortescue operate their Pilbara projects — found these agreements alone delivered approximately $8.9 billion in royalties in 2022-23, or 71.48% of total royalties paid to the state that year (Office of the Auditor General WA, Management of State Agreements, Oct-2024). A small number of companies, operating under a small number of decades-old agreements, mining one commodity sold overwhelmingly to one buyer: that is the actual shape of the revenue base sitting beneath the surplus headlines.
The critique
The state's genuine diversification effort has been small next to the scale of the windfall it is meant to offset. The Cook Government's Strategic Industries Fund, its flagship diversification vehicle, is being built up to a total value of $1 billion (approx.) — a fraction of what iron ore alone hands Treasury most single years. Lithium was pitched, at the peak of its own 2022 boom, as WA's genuine second pillar; instead its royalty income proved just as cyclical as iron ore's, collapsing alongside a global lithium price fall of roughly 90% from its December 2022 peak into 2025 (approx.), before a partial recovery. Diversifying within mining, into a second commodity with its own boom-bust cycle, is not the same thing as diversifying away from mining's price exposure altogether — and the state's own record now shows it has tried the former, not the latter.
Nor has Western Australia built a structural buffer to sit alongside its genuinely low debt. The one legislated vehicle designed for that purpose, the WA Future Fund, was established in 2012 under the Barnett Government to bank 1% of the state's royalty income for "future generations," with its principal quarantined from spending. In 2020, the McGowan Government repurposed it into the Future Health Research and Innovation Fund, redirecting its earnings to a specific, worthy but narrower purpose — medical research — rather than continuing it as a general-purpose buffer against the commodity cycle (WA Government, "New era for health research and innovation funding," media statement, Sep-2019, Act amendments commenced 24-Jun-2020). Norway saves oil revenue in a sovereign fund designed to outlast the resource. Western Australia's one comparable vehicle was repurposed within eight years of being created, before it had accumulated anything like a scale that could cushion a genuine downturn.
WA has spent a decade proving it can manage a mining windfall better than most states manage anything; it has not yet had to prove it can absorb the windfall shrinking.
The risk to the future
A Treasury forecast that shrinks the state's biggest revenue line, with no buffer built to absorb it
Three risks are stacking on top of each other, and none of them are hypothetical. First, the price assumption itself: the Simandou project in Guinea, one of the largest untapped iron ore deposits in the world, began operations in November 2025 and is expected to ramp toward as much as 120 million tonnes a year of high-grade supply competing directly with the Pilbara for Chinese steel mills' orders (WA Iron Ore Profile, Jan-2026) — a supply-side pressure layered on top of Treasury's own long-term price assumption, not accounted for separately in it. Second, the GST floor deal itself is under live review: the Productivity Commission is now conducting a fresh inquiry into the 2018 GST distribution reforms, with an issues paper released in November 2025, submissions closed in February 2026 — WA's own government among them — an interim report due in August 2026 and a final report to the Australian Government by December 2026, well before the current "no worse off" guarantee's 2029-30 sunset (Productivity Commission, GST distribution reforms, Issues paper, Nov-2025). Third, there is no accumulated fund of any real scale to smooth the transition if both risks land together, because the one vehicle built for that purpose was redirected to a different use in 2020. Western Australia has been here before: a comparable iron ore price collapse in the mid-2010s helped turn state surpluses into a budget deficit of roughly $3 billion within a few years (approx.), the very trajectory the 2018 Langoulant Inquiry was commissioned to explain. Low debt gives the state real room to borrow through a downturn without wrecking its credit rating — that is the genuine strength this government has built. But room to borrow is not the same as a plan for what happens to hospital wings, Metronet extensions and household power credits, all built on the assumption of $8-plus billion a year from one commodity, when the price and the buyer that funds them both move at once.