A record surplus fed by surging mining royalties and improved tax receipts is expected to give the WA Labor government room to offer cost of living relief.

The state’s 2022/23 budget will be handed down on Thursday by Premier and Treasurer Mark McGowan.

It is expected to include a $400 credit for each of more than one million households to pay their power bills, The West Australian reported ahead of the budget.

The near $450 million in funding for the credit will be drawn from another massive operating budget surplus tipped to weigh in at more than $7 billion, on top of a forecast $2.4 billion for 2021/22 and a record $5.6 billion in 2020/21.

The government has already announced billions of dollars in new spending measures, from health to electric vehicle rebates, on the back of its strong balance sheet – a rarity in a nation where other state budgets are in the red.

“Every other state in Australia is in deficit and racking up big debt bills … we’re doing the opposite … and that gives room to do more in terms of cost of living,” Mr McGowan said on Wednesday.

WA posted the highest quarterly inflation figure of all states and territories last month at 7.6 per cent.

Shadow treasurer Steve Thomas had speculated the budget would include an electricity rebate, but has also called for a freeze on all government fees and charges.

The budget is also expected to include a funding boost for the WA public health system, as hospitals struggle with workforce pressures and the spread of COVID-19.

The government will allocate another $1.6 billion to the pandemic response, including $635 million for the ongoing provision of free rapid antigen tests for WA residents.

WA recorded its highest daily infection rate on Wednesday at 17,033 cases.

Spending on mental health, alcohol and other drug-related services is also set to climb to a record $1.3 billion in 2022/23.

Funding for health infrastructure – including $16.7 million for 10 more beds for the ICU unit at Perth’s Sir Charles Gairdner Hospital – will come in at $1.6 billion over four years.

Health Minister Amber-Jade Sanderson has already announced a further $252 million for emergency departments, amid a sustained surge in ambulance ramping with patients waiting longer to be handed over by paramedics into hospital care.

She has also promised to chair a new ministerial taskforce to fix what St John Ambulance says is as a near-record ambulance backlog.

With the pressure on household budgets rising, Shelter WA CEO Michelle Mackenzie said there is a desperate need for affordable rental homes and wants the government to establish a “future fund” for housing.

“That way, we know that into the future there will be an ongoing investment for safe and stable, affordable, and social homes,” she said.

“What a legacy that would be.”

Global credit rating agency S&P has forecast a 2022/23 WA budget surplus of $7.9 billion, followed by $5.8 billion in 2023/24 and $5.7 billion in 2024/25.

“It’s a rare feat given the scale of the COVID-19 shock,” analyst Martin Foo said in a statement.