The government has thrown out an early marker for the 2017 state election.
Colin Barnett's decision to stay on and lead the Liberal Party into the 2017 election was a surprise to many, as he had indicated the top job would be a matter for consideration during next year.
The position was essentially an issue because of the premier's age, although there is a group of MPs within the party room, including some former ministers, who are less than impressed by his leadership skills, especially in the area of people management.
Mr Barnett will be aged 66 at the time of the next election, making him the oldest premier to lead his party in seeking another term since Sir Charles Court, who was 68 when he won a third term in 1980.
All things considered, both sides of politics have generally responded positively to the announcement.
From the Liberals' perspective, the Barnett announcement ends the uncertainty. The government can plan its re-election strategy knowing – barring unforeseen circumstances –its most experienced performer is at the helm. After 24 years as an MP, including eight years as a senior minister and the past six years as premier, he has become well versed in what's required to run the state.
But the decision of former treasurer Christian Porter to switch to federal politics last year, and Troy Buswell's implosion and subsequent resignation from parliament, meant there were no obvious successors with the necessary experience to take over.
Deputy Premier Kim Hames has flagged his intention to retire, and ministers such as Liza Harvey (police), Albert Jacob (environment) and the currently under-fire Dean Nalder (transport) lack the experience to take over at this stage.
Another factor is the record of premiers who have taken on the job in mid-term. In fact of the four premiers in this category in the past 35 years, only Labor's Peter Dowding (in 1989) was successful. Ray O'Connor (Liberal, 1983), Carmen Lawrence (Labor, 1993) and Alan Carpenter (Labor, 2008) have all led their parties to defeat.
Mr Barnett's decision to stay on was also welcomed by opposition leader Mark McGowan, who has outpointed the incumbent in the 'preferred premier' category in recent opinion polls.
Mr McGowan didn't hold back listing the areas in which he thinks the government is vulnerable: the loss of the triple-A credit rating; job insecurity; city traffic congestion; and education issues. The opposition will also go on the attack over alleged broken promises and the rapid growth in state debt.
The decline in iron ore prices, which affects royalties and general activity in the mining sector, also plays into the opposition's hands. And Mr McGowan and Labor's treasury spokesman, Ben Wyatt, will smell blood should the state budget slip into deficit.
The battle lines are being drawn.
Budget blues
Treasurer Mike Nahan's budget problems will be revealed in a couple of weeks when he releases Treasury's mid-year budget review; and the tip is it will contain lots of red ink.
In fact all the predictions point to Western Australia sliding into deficit this financial year for the first time in 15 years. The message? The good times are well and truly over.
Colin Barnett has effectively conceded defeat over his goal of never having to preside over a budget deficit. That was a prediction he made early in his government's life. It looked a pretty safe bet then, but the winds have not been friendly in recent times.
The Treasury virtually said as much in its recent report for the September quarter, stating that public sector revenue and expenditure for the first quarter had been "broadly similar to the same period in 2013-14". The deficit after three months this year was $347 million ($343 million last year), although there was a recovery last time, resulting in a healthy surplus of $719 million for the financial year just finished.
But the latest report added these chilling, words: "However state finances are expected to show a decline during coming quarters as the recent decline in international iron ore prices impacts on general government revenue collections."
That's Treasury code for 'don't expect revenue to bounce back this time to achieve the predicted (optimistic) surplus of $175 million'.
Murphy's law is applying to the budget this year. That is, everything that can go wrong is going wrong. Revenue for the first quarter is down 1.4 per cent on the same period last year, royalty income is down $221 million, due mainly to the collapse in iron ore prices, and GST grants dropped $52 million.
There was some good news. Expenses dropped, too, with signs the government is getting on top of the public sector wages bill. Salaries grew by just 1.9 per cent, the lowest in 14 years.
But get ready for more belt tightening, and the sugar-coated message along the lines that the government will have to be cruel to be kind.
