But critics are asking why the state continues to have a "crumbling" health system and housing crisis.

Premier Mark McGowan said his national counterparts must be "green with envy" as he confirmed the current financial year's surplus and a spending plan for 2022/23.

Moody's Investors Service said a projected $1.6 billion surplus next year was likely understated with a conservative assumption of iron ore prices.

"Bumper iron ore export prices and volumes have fuelled the Western Australian economy to be firing on all cylinders, continuing to underscore the stark contrast between the state and its domestic peers," vice president John Manning said in a statement.

The budget has been well received by analysts at S&P Global, which recently retained WA's AA+ credit rating.

"Despite the recent spread of COVID-19 in Western Australia, revenue growth is strong and underpinned by elevated commodity prices and GST reforms," analyst Anthony Walker said in a statement.

"We could raise the ratings within the next one to two years if it continues to achieve strong financial outcomes."

State opposition leader Mia Davies described the surplus, which follows last year's record $5.8 billion figure, as "eye-watering".

"How can this be? When we have a crumbling health system, and a housing crisis," Ms Davies said.

"You can't have multi-billion dollar surpluses two years in a row, and not share the wealth of the nation with Australian households struggling to make ends meet."

WA's hospital emergency departments are grappling a sustained surge in ambulance ramping, as patients wait longer to be offloaded by paramedics.

The Australian Medical Association's WA President Mark Duncan-Smith welcomed $252 million in new funding to address the problem, but said he doesn't expect immediate results.

Funding for health overall will grow to $11.2 billion in 2022/23.

WA ranks last of all states and territories for hospital beds per capita, Dr Duncan-Smith said, adding that funding to reopen another 430 beds will help.

"It'll probably see WA get off the bottom of the list ... but we'll probably only get to second from the bottom," he said.

Dr Duncan Smith said the state needs another 500 beds - the equivalent of a new tertiary hospital - to ease the burden on the public hospital system.

The budget allocated $1.6 billion to the COVID-19 response including $635 million to continue providing free rapid antigen tests.

Mr McGowan said that, despite the cost of the pandemic response, state net debt will fall below $30 billion this year, with a further $1.2 billion repaid.

Shadow Treasurer Steve Thomas accused the premier of breaking a 2017 promise to redirect half of the state's iron ore revenue to repay debt.

"Here again we have massive budget surplus but no plan for economic reform, and an inadequate debt repayment program," he said.

WA's GST revenue will grow from $5.9 billion in 2022/23 to $7.4 billion in 2025/26.

Australian Associated Press