Western Australia’s Treasurer has signalled the government will increase its long-term iron ore price assumptions in this week’s budget, but warned Canberra against “strangling” the mining state with GST and environmental reforms that would derail its national economic contribution.

Armed with fresh Treasury analysis of WA’s contribution to the federation, Treasurer Rita Saffioti will use her first budget to mount a fierce defence of the state’s GST allocation, while increasing its iron ore price assumptions.