PERTH, AAP – Health and housing headaches loom large for West Australian Premier Mark McGowan as he prepares to hand down a record budget surplus.

Amid a backdrop of disruption caused by the coronavirus pandemic, the $5 billion surplus expected to be unveiled in Thursday’s budget will reinforce WA’s position as one of the best-performed economies in the world.

But it hasn’t been all smooth sailing for the popular premier, who six months ago led Labor to a sweeping victory at the state election.

Health unions have blamed a lack of investment for chronic overcrowding and staff shortages at public hospitals.

The government has been forced into reactive measures such as postponing some elective surgeries, despite having a negligible coronavirus caseload.

Doctors have questioned whether WA’s hospitals would cope if the state did have a significant outbreak.

With iron ore royalties again generating a significant windfall for the state, the McGowan government has promised to open 332 new hospital beds as part of an additional $1.9 billion health investment in Thursday’s budget.

A major recruitment drive is underway to find an additional 600 nurses over the next two years.

Mr McGowan, in his capacity as treasurer, will also formalise a promise to build 3300 new social homes over the next four years.

The budget will include $875 million for the sector, including $228 million for projects to increase housing stock in the short term.

Since Labor came to office in 2017, WA’s public housing waitlist has blown out to about 17,000 people.

Acute demand for housing among the most vulnerable has spiked since a moratorium on rental evictions ended in March.

A further $1 billion will be allocated to WA’s management of COVID-19, supporting police and other frontline workers.

Whether any significant economic reforms will be pursued remains unknown.

Asked what might be expected in the budget, Mr McGowan highlighted the health and housing policies and a promise to end the logging of native forests from 2024.

“We’re using the budget to achieve amazing social, health, environmental and economic outcomes,” he told reporters on Wednesday.

Last year’s budget notably included an assumed timeline for ending the hard border closures that applied to the rest of Australia, although they have since continued more selectively through WA’s new “controlled border” regime.

WA now finds itself in a similar state of limbo, with Mr McGowan defying pressure to comply with national reopening targets tied to vaccination rates.

Mia Davies, whose Nationals party now sits in opposition following the Liberals’ humiliating election defeat, has renewed calls for Labor to pump more funding into the bush through the Royalties for Regions program.

The opposition leader accused the McGowan government of using the scheme to underwrite its broader spending.

“The premier now sits on a $5 billion surplus delivered by a booming iron ore sector, so it’s time to stop short-changing the people of regional WA and fix what he and his team broke,” she said.