Delivering his budget earlier today, Buswell said the iron ore price was having a large impact on government coffers.
“More than ever in our history we are exposed to what happens to the exchange rate and iron ore prices,” Buswell told journalists.
Government revenue is set to grow by just 2.7% over the coming year compared to what Buswell announced in spending.
State debt is expected to blow out to $A28 billion over the coming four years as part of the government’s increased spend on infrastructure.
The budget showed a 5.5% unemployment rate, which is expected to grow to 5.75% in 2014-15 as mining and oil and gas projects move from a construction phase to a production phase.
It shows a 3.3% contraction in the rate of business investment, which Buswell said peaked earlier than expected.
“For every two jobs in the construction phase on one of these projects, there is only one job during production,” he said.
Buswell said the move to production would provide an important source of revenue for the government and it was consistent with the business cycle.
“This is simply a change in the nature of the economy,” he said.
“It’s really important we don’t talk down our state economy.”
Exports are expected to have grown by 9.5% in 2012-13, driven by an increase in production capacity by producers such as Fortescue Metals Group.
Iron ore exports are expected to be stronger in the first half of the budget period and are anticipated to grow at a “solid pace” beyond the first half.