Western Australian households have been left relatively unscathed by the McGowan government's first budget, but the big end of town will bear the brunt of repairing the state's disastrous finances.
Labor handed down its first budget on Thursday and has quickly set about trying to reduce the state's spiraling record debt, which is expected to blowout to a whopping $43.8 billion by 2020.
The McGowan government boldly claimed despite a current operating deficit of $2.3 billion, a return to surplus of $1.3 billion is achievable by 2021.
The state government is planning to introduce a number of tough "budget repair" measures in an attempt to save $3.5 billion.
Without them, the government said, debt would be forecast to hit a staggering $47.2 billion.
But miners and big business won't take kindly to having to dip into their very deep pockets to help repair the state's economic woes.
Miners will now be slugged a 3.75 per cent tax, (up from 2.5) when the gold price goes above $1200 an ounce. Gold is currently worth $1600 an ounce.
And the exemption that existed for miners who produced less than 2,500 ounces of gold a year has been scrapped.
The new gold tax is expected to pour $392 million into the state's kitty over forward estimates.
Treasurer Ben Wyatt said the gold tax was "moderate".
"At current levels, increasing the royalty rate to 3.75 per cent equates to an additional royalty of about $20 per ounce," he said.
"Introducing a tiered gold royalty rate provides a safeguard against future gold price reductions by ensuring producers will pay the current 2.5 per cent royalty rate if the gold price falls to $1200 per ounce or below."
Big business has also been targeted with the introduction of a temporary payroll tax for the next five years.
WA businesses whose earn more than $1 million a year will pay a payroll tax of 6 per cent, up from 5.5 per cent.
Businesses that earn more than a $1.5 million per annum will be hit with a 6.5 per cent pay roll tax.
The tax, which will kick in around July 1 next year and top up the state coffers by $435 million over the next few years, is expected to affect around 1200 businesses.
The McGowan government can expect backlash from the mining and business sector over the new taxes.
And the state opposition will leap on the McGowan government after its pre-election pledge not to introduce any new taxes.
Mr Wyatt said the tax was "tough" but it was necessary to help rein in debt.
"Around one-fifth of the additional revenue generated from this measure is expected to be paid by the larger iron ore producers in the state," he said.
"This responsible measure will only apply for five years, by which time the state's finances are on a more stable footing".
As part of the government $3.5 billion budget repair, the public sector will be gutted, which is expected to save $1.7 billion.
The McGowan will embark on a massive redundancy program which could see 3000 jobs go, on the back of its previous public sector reform which saw government departments slashed.
The treasurer claimed Royalty for Regions was not "dead" even though the money in the kitty will be redirected
The government has also set aside $1.3 billion for its pet rail project Metronet.
- $441 million to extend the Joondalup line to Yanchep
- $423 for the Thornlie-Cockburn Link
- $323 million for 102 railcars
The government is planning to tackle domestic violence head on, setting aside $12.4 million over forward estimates, which includes setting up two new women's refuges in the metropolitan and Peel regions.
Other major funding:
Health:
- $132 million to combat methamphetamine
- $83.5 million to create a Meth Border Force and $42.5m for a rehab centre in the South West and for a rehab facility at the Wandoo Prison
Education:
- Around $5 billion will be spent on education in the next financial year, including $1.4 billion on new infrastructure
- $58.9 million to employ 300 new education assistants
- $17 million to convert classrooms into science labs
