WA State Budget: Middle East conflict causes re-think for Treasurer Rita Saffioti

Treasurer Rita Saffioti has been forced to rethink her state Budget, saying there will be a greater focus on support for households as the Middle East conflict and rising interest rates play havoc with already stretched family budgets. She said the May 7 Budget would focus more on supporting households whacked by rocketing fuel prices and rising mortgage payments. “In the middle of last year when interest rates were coming down, we were looking at what we thought was a different future,” Ms Saffioti this week told The West Australian. “But now, with both the price impacts of the Middle East war and the interest rate impact, the environment has changed. “We were always looking at ways to support households, but the recent economic shocks have made us go back and re-look at how we can support households.” Ms Saffioti has two weeks to lock in the State Budget, her third since taking over as Treasurer from Mark McGowan. She said the rapidly changing ramifications of the Iran War was making preparing the budget tough. “I was involved in all the budgets during COVID in the Expenditure Review Committee,” she said. “They were really hard times. But as Treasurer I’d say this budget is the toughest. “(Increased) fuel prices are the obvious effect (of the conflict), but there might be hidden impacts in relation to supply chains, in relation to other parts of the economy. “And they normally take a little bit more time to flow through and be evident. “There’s the obvious and there’s the hidden impacts – and you have you have to be ready to handle them all.” For several years, the WA Government made power bill rebates the cornerstone of cost-of-living relief. A 2026-27 power bill rebate appears highly unlikely, with RBA boss Michele Bullock this week cautioning that any restart of government subsidies to deal with the global oil issues would put more pressure on rising inflation, possibly fuelling a third rate hike this year when the RBA board meets just before Ms Saffioti’s budget in May. “You have got to get the balance right,” Ms Saffioti said. “And that balance is that you need to support families and households while not fuelling inflation.” The Cook Government has accumulated a $2.4 billion surplus for the first six months of this financial year. Social service groups this week called on the Cook Government to provide significant and targeted cost-of-living relief, with Perth rents exceeding $700 a week and low-income earners struggling to house and feed their families. “We need to use our unparalleled wealth as the richest state in one of the richest countries in the world to make sure these rent, cost-of-living and interest rate rises don’t hit those who can least afford it,” Anglicare boss Mark Glasson told West Australian. “We need more support for emergency relief, which is being overrun with requests. “The WA Rent Relief Program has been an incredibly successful program with the State Government, and we’d like to see sustainable support for that. “We also want to see a comprehensive cost‑of‑living strategy that ensures no West Australian is left behind.” Ms Saffioti said housing supply remained a top priority. “What you will see in the Budget is a massive focus on increasing the production of housing,” she said. “Demand outstrips supply in WA, and as a result we need to increase supply.”