Economic diversification, with a particular focus on energy decarbonisation, is a key feature of the 2025-26 Budget. There is investment across a range of initiatives designed to attract new and emerging industries, invest in the State’s economic infrastructure, as well as support the State Government’s Made in WA plan.
Overview
The State Government has announced a further $500 million for the Strategic Industries Fund (taking the total investment to $1 billion), to de-constrain and activate Strategic Industrial Areas across the State, including in the Pilbara, South West and Mid West.
WA manufacturing remains a focus, with funding to deliver on the intent of the Made in WA plan, including $50 million to build the capacity of the Western Australian battery industry and $25 million to manufacture transmission towers and components at facilities in Forrestfield and Picton, as well as establishing a Local Industry Development Fund. There are also top-ups to a range of targeted economic diversification funds, including $40 million for the New Industries and Innovation Fund, $30 million for the Investment Attraction Fund, and $30 million (allocated beyond the forward estimates) for the Collie Industrial Transition Fund.
On the energy transition, $584.3 million has been provided to Western Power to progress the Clean Energy Link – North project and the reinforcement of Regans Ford terminal to enable additional renewable energy generation to connect to the grid. The Economic Regulatory Authority will also spend $2.2 million over 2025-26 to 2028-29 for two senior executive staff to assist with managing additional responsibilities as part of the Government’s Energy Transformation Strategy.
Tourism received a boost with $21 million for initiatives through the Government’s Outdoor Adventure Package which will to drive regional tourism across Western Australia and support local jobs and businesses. An addition $7.4 million has been allocated to support the tourism and hospitality industries in the Swan Valley and Perth Hills.
WALGA Comment
This budget highlights the strong focus of the State Government to diversify the WA economy through manufacturing and new energy industries. This builds on the recent Machinery of Government changes announced, resulting in the new Department of Energy and Economic Diversification from July 2025.
Local Government involvement in new and emerging industries is critical to their success, ensuring local opportunities in employment and growth are realised.
