Colin Barnett and Opposition Leader Mark McGowan face abandoning major promises after the State election with forecasts suggesting the WA economy has peaked with less cash flowing into Treasury coffers.
Deloitte Access, in its quarterly report on the state of the national economy released today, has pared back expectations for the State.
Access is forecasting slower economic growth, population growth and household consumption than the State Government's most recent projections.
It is also much less upbeat about jobs growth than the Government.
Those projections underpin the Barnett Government's razor-thin $140 million surplus for the current financial year and a $187 million deficit for 2013-14.
According to Access, the shift of major mining projects from construction to production will bring overall growth - and growth in tax-yielding areas like consumer spending - down to a more modest level. That will have a flow-on impact to the money available for whichever party wins the March State election.
"It may well be that both output and demand growth have already peaked for this cycle," Access said. "Indeed, although it remains very low, unemployment shifted up notably in recent months as miners embarked on a round of cost-cutting in response to the emerging economy slowdown.
"And although there is still a marvellous amount of spending getting done in a very short period of time, the peak in the latter may not be that far away."
Access said there were already clear warning signs for WA.
The State's jobless rate has climbed 0.8 percentage points since the middle of last year. Only Queensland, where the Government has slashed public service jobs, has suffered a larger increase.
The abandonment of major mining projects last year was a sign of how quickly WA's fortunes could turn. Only a continued increase in the price of iron ore, which yesterday hit $US148 a tonne, stands in the way of the Budget hitting substantial trouble over the next six to 12 months.
There may also be financial challenges for the Gillard Government and Abbott Opposition because of the natural disasters that have devastated parts of Queensland, NSW, Victoria and Tasmania.
The Federal Government introduced a levy on middle to high income earners to cover some of the costs associated with the 2011 floods that hit Brisbane.
Treasurer Wayne Swan, who has already abandoned the Government's commitment to a Budget surplus this year, would not be drawn on whether a similar levy would be required this year.