The allocation of $21 million in 2014-15 towards building the $428 million museum is the only good news in an otherwise austere budget for arts and culture.
Excluding the capital works, funding for arts services has been cut by 1.6 per cent to $127.3 million.
Treasurer Mike Nahan said the Government's investment in the new museum was progressing on time and on budget for an opening in 2020.
Construction was expected to start this year on the new wet stores and laboratories at the museum's collection and research centre at Welshpool.
The Chamber of Arts and Culture WA said there was little joy for the arts sector.
Chamber chairman Warwick Hemsley said $7.8 million for equipment upgrades and $24 million towards regional centres had done little to disguise the 10-year decline in arts funding from just under one per cent to 0.45 per cent as a proportion of the total Budget.
Mr Hemsley also raised concerns about the State's increased reliance on Lotterywest to prop up the arts budget.
He backed the construction of legacy projects such as the State Theatre Centre and the new museum but questioned whether the arts would flourish enough to provide the necessary content for them.
The lack of indexation for small to medium arts organisations could deliver them a lingering death, he said.
"Their ability to attract income and support from the private sector is compromised by the lack of critical resources that proper core funding can provide," he said.