The Cook government will increase the first-homebuyer stamp duty exemption threshold for the first time in a decade as it uses its iron ore-driven financial firepower to address the state’s cost-of-living pressures and population-driven housing crunch.
That small change to the unpopular tax was a key announcement of Premier Roger Cook and Treasurer Rita Saffioti’s first budget, which Cook said had something for everybody but was particularly focused on addressing cost-of-living pressures and the state’s housing crisis.
WA Premier Roger Cook and Treasurer Rita Saffioti deliver the state budget on Thursday.Credit: Hamish Hastie
“My goal is supplying support for families, seniors, tradies, renters, in fact … this budget delivers for every Western Australian,” Cook said.
“We are now the envy of the nation.”
In addition to the stamp duty changes, the $400 electricity bill credit returned, which meant government fees and charges for the average West Australian household would drop in total by 2 per cent to $6183.
However, this hides total increases in electricity, water, car registration and the emergency services levy that will be borne by WA households in the future, though the government argued that $3.6 billion in concessions on offer would save residents elsewhere in their home budgets.
Under the new stamp duty regime, the exemption threshold for first home-buyers will increase from $430,000 to $450,000, meaning savings of up to $15,390 for those who purchase a house in the threshold range.
First home-buyer stamp duty concessions will also be applied to home purchases up to $600,000 – up from the previous threshold of $530,000, which the government predicted could reduce the cost of buying a home up to a maximum of $7182, depending on the purchase price.
This measure will be a small relief to first homebuyers though who are faced with entering a property market that has increased on average by $110,000 per home in the past 12 months alone.
Despite the state’s skyrocketing house prices, Saffioti said government modelling suggested 5000 people would benefit from the change, which would cost the state $82 million over the forward estimates.
Walking the population tightrope
About $1.1 billion in extra spending on housing, including a more ambitious public housing target of 5000 (up from 4000), showed the government was walking a tightrope when it came to population growth.
An increase in 94,000 people in WA in a single year helped drive a massive 5.25 per cent increase in the state’s economy, but has exacerbated its housing problem.
With the state population expected to crack 3 million people by next year, Saffioti said she was aware of the challenge.
“This an extraordinary period for WA where we’re seeing impacts in the economy that we couldn’t have forecast probably four years ago,” she said.
“I recall people saying no one would ever come back to WA and the opposite has happened.
“We will continually work to see how we can adapt to the ever-changing environment but it is a challenging environment.
“Strong population growth helps support the economy and of course helps keep consumption strong.”
Royalty windfalls continue
The $9.8 billion in iron ore royalties – up $900 million compared to the mid-year review – as well as stamp duty bolstered the state’s bottom line and helped the government deliver its seventh surplus in a row.
However, volatility in other commodities such as lithium, as well as delays in federal government Metronet payments and increased spending, painted a less rosy fiscal picture for the government than previous years.
Revenue was up to $46.2 billion while expenses have hit $43.6 billion – up $1.7 billion from last year.
The state’s 2023-24 surplus of $3.2 billion has been eroded by $500 million since December, and the expected surplus this year has dropped from a predicted $3.45 billion to $2.6 billion.
Despite continued windfalls, the state’s ambitious $42.4 billion infrastructure program – expected to increase from a record $10.6 billion this financial year to $12.1 billion next year – is eating into its cash surplus, which is predicted to be -$3.6 billion next financial year and -$3.9 billion in 2025-26.
Metronet posted cost blowouts of $707 million, but Saffioti was quick to point out that the federal government would cover two-thirds of that.
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