Iron ore keeps WA on track for surplus

West Australian Premier Mark McGowan has ruled out any further increase to the wage offer for nurses after unveiling almost $5 billion in new spending.

The mid-year budget review, handed down on Thursday, is headlined by a $1.8 billion forecast surplus in 2022-23.

It is well down on last year's $6 billion record but still a slight improvement on the figure projected in the May budget, which forecast the iron ore price would average just $US77 ($A112) per tonne this financial year.

The price of the steelmaking commodity which provides significant royalties to WA's economy has instead climbed to about $US108 ($A157) per tonne.

A total of $4.8 billion in new spending is forecast across the next four years, including an additional $1.4 billion on the public sector wages policy which has now been accepted by about 85,000 workers.

Since delivering the budget, the government has twice increased its wages offer to include a minimum three per cent pay rise and a $3000 bonus payment.

Nurses, who went on strike last month, and police officers are yet to accept the deal and are seeking a five per cent pay hike.

Applying that increase across the public sector would add an extra $2 billion to the state's debt in an environment of high interest rates, Under-Treasurer Michael Barnes said.

The premier ruled out any change, saying while WA's economy continued to perform strongly the global economic outlook was deteriorating.

"Our pay increases are set. That is our position," he told reporters.

"It is far more generous than virtually anywhere in Australia and I just want them to get the money as soon as we can possibly get it into their pockets."

The government will spend $1.6 billion on higher interest payments on state debt in addition to significant outlays on economic diversification and health, including plans to improve patient flow in emergency departments.

Net debt has been revised down to a projected $29.6 billion but it is projected to climb slightly in coming years.

While the iron ore price has consistently outpaced the McGowan government's conservative projections, the midyear review forecasts $US87 ($A127) per tonne in 2022-23 before a return to its long-run average of $US66 ($A96) per tonne.

Opposition treasury spokesman Steve Thomas accused the premier of using "accounting tricks" to hose down community expectations.

"The mid-year review has confirmed that iron ore royalties and state taxes remain significantly higher than predicted in the May budget," Dr Thomas said.

"This means that state government revenue remains high enough for the government to assist those West Australians that are struggling with eight interest rate rises in a row this year."

WA's economy is forecast to grow by three per cent this financial year, while unemployment is tipped to average just 3.5 per cent.