Rita Saffioti’s surplus problem isn’t money. It’s credibility.

Western Australians are being told two stories at once, and they no longer sit comfortably together.

On the one hand, households are warned—correctly—that the cost of living is biting. Rent is up. Food is up. Power bills and insurance premiums continue to climb. The Government acknowledges this pressure regularly, often solemnly.

On the other hand, when the Treasurer fronts the media to discuss the State’s finances, the message shifts. WA is booming. Consumer confidence is strong. Discretionary spending is higher here than anywhere else in the country. The implication is clear: while things may be tough, people are still spending, and the economy is humming along just fine.

Both claims cannot be true in the way they are being presented. And the refusal to reconcile that contradiction is the central problem with Treasurer Rita Saffioti’s pre-Christmas Budget update.

This is not a debate about whether Western Australia has money. It does. Revenue is surging across the forward estimates, driven by population growth, inflated property values boosting stamp duty, and mining royalties that continue to outperform conservative Treasury forecasts. The idea that iron ore prices will suddenly collapse to levels no credible analyst expects may be a useful budgeting habit, but it does not change the underlying reality: the State is awash with cash.

The real question is why the Government insists on talking around that fact rather than addressing it honestly.

When pressed on the absence of broad, new cost-of-living relief, the Treasurer pointed to aggregate discretionary spending figures, highlighting that WA households are spending more than those in other states. But aggregate figures are blunt instruments. They tell us very little about who is spending, and even less about who is struggling. Averages smooth out inequality by design. They mask the widening gap between households doing exceptionally well and those quietly falling behind.

It is entirely possible—indeed, likely—that both things are true at once: that parts of the economy are booming, while a growing cohort of families is under genuine financial strain. Pretending otherwise may be politically convenient, but it is economically shallow.

The Government’s defence is that restraint is required. Spending too quickly risks fuelling inflation. Cash handouts could make matters worse. Construction capacity is already stretched, limiting the ability to fast-track hospitals, housing and infrastructure without crowding out the private sector. These are not frivolous arguments. They deserve to be taken seriously.

But they do not explain why billions of dollars are being quietly parked in the Budget for unspecified “future priorities”, to be decided later. That is not discipline so much as deferral. It allows the Government to avoid hard choices now while retaining maximum political flexibility down the track.

In other words, the Treasurer wants credit for restraint without fully owning the consequences of inaction.

Compounding the problem is the uncomfortable truth that many of these constraints are self-inflicted. Years of stacking major road and rail projects on top of one another—often announced with great fanfare—have narrowed the Government’s room to manoeuvre. Expenditure growth did not spiral accidentally. It was the product of deliberate sequencing decisions.

Shadow Treasurer Sandra Brewer is correct on at least one point: the difficulty now facing the Government is largely of its own making. When everything is treated as a priority, flexibility disappears. The bill eventually comes due.

There is also a broader political context the Treasurer would prefer not to dwell on. At the federal level, Treasurer Jim Chalmers is cutting spending and managing deficits. At the state level, Western Australia continues to benefit from a GST arrangement that leaves other states increasingly resentful. That dynamic places limits on how loudly WA can celebrate its good fortune, or how brazenly it can distribute it.

So instead, money is banked. Decisions are delayed. The conversation is carefully managed.

Meanwhile, ageing hospital infrastructure—such as at Fiona Stanley Hospital—still requires urgent attention. Housing supply remains tight. Families hearing mixed messages about whether their struggles are easing are left uncertain about whether help is coming, or whether they are simply expected to absorb higher costs indefinitely.

This is not a demand for reckless spending, nor a call for populist giveaways. It is a call for honesty.

If the Government believes cost-of-living pressures are genuinely easing, it should say so plainly and accept the political risk that comes with that assessment. If it believes families are still hurting, it should explain—clearly and credibly—why billions are being stockpiled instead of deployed in targeted, transparent ways.

What it cannot continue to do is argue both positions at once, depending on the audience.

Because sooner or later, people notice. And when they do, a surplus stops looking like prudent management and starts looking like avoidance.

That is the Treasurer’s real Christmas dilemma. And it won’t disappear with the decorations.