Fed funds cut WA deficit to below $1.3b

Western Australia's budget deficit will be less than $1.3 billion once the federal government's one-off infrastructure windfall is included, Premier Colin Barnett says.

The state government projected in December's mid year review a 2014/15 deficit of around $1.3 billion, WA's first in 15 years.

"You'll see when the budget comes out, we're still in deficit, but it has been significantly reduced by tightening up on expenditure and also by that $500 million from the Commonwealth," Mr Barnett told reporters after the federal budget was handed down.

The $499 million Commonwealth funds, to be spent on roads, didn't make it into Thursday's state budget papers but will be reflected in September's audited accounts.

The WA opposition feared the deficit could be as high as $2 billion.