Warning on pricey poll pledges

Colin Barnett and Mark McGowan will be put on notice today that despite a turnaround in iron ore prices, a spendathon flowing from election promises would put at risk WA's triple-A credit rating.

The pre-election fiscal outlook will be released by Treasury and is expected to show the Budget in a better position than it was at the midyear update in December.

An improvement in the iron ore price, plus some extra cash from the Federal Government, is tipped to boost this year's expected surplus.

Unlike the midyear update, the pre-election report is solely under the control of Treasury officials rather than the State Government.

ANZ senior economist Cherelle Murphy estimated iron ore royalties alone were likely to be $480 million stronger, which would move through the forward estimates and may be enough to eradicate the forecast $187 million deficit.

However, Ms Murphy cautioned there would be little tolerance from ratings agencies of new recurrent or capital spending unless there were equivalent offsetting savings or revenue-raising measures.

The West Australian

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