‘Uncertain times’: Cook blames Iran war for hospital budget blowout

The $1.8 billion Women’s and Babies Hospital in Murdoch will likely blow out, with both Premier Roger Cook and Health Infrastructure Minister John Carey flagging construction cost pressures were impacting the state’s entire hospital infrastructure pipeline.

Cook and Carey made the admission while announcing another $1.5 billion injection into hospital infrastructure, with $500 million allocated to the building hospitals fund, $214 million for maintenance funding and $36.2 million to establish a new office tasked with commissioning the new hospital builds.

About $750 million is so far unallocated, with Carey suggesting further announcements would be made in the lead up to the May budget.

The announcement was made at the Women and Babies’ Hospital site, where piling works were ongoing.

Carey did not detail how much of the additional funding announced was to cover cost hikes in its hospital build program, but conceded there would be escalations.

“I’ve been very frank about this before. These projects are complex. They can generate cost escalations. But in addition to that, we face a very uncertain scenario with the Iran war and the impact of fuel costs on construction,” he said.

“I’ve been on the record before, the construction sector is not immune, whether it’s housing or hospitals, from those cost pressures, and so we are making it very clear that in these portfolios, it is tough, given the uncertainty.”

When asked whether he could guarantee no more cost blowouts on hospital builds, Cook said: “No, we can’t.”

“I mean, we live in uncertain times, and we know that cost escalations are a reality of a lot of major projects, particularly projects that have such a strong interface with the costs associated with transport and fuel costs,” he said.

When asked whether he could guarantee the Women and Babies Hospital would be built for $1.8 billion, he said he couldn’t guarantee that either.

“But of course, no one can guarantee anything in these uncertain times in which we live, and there are commissioning costs on top of that,” he said.

The cost of the hospital has been under the spotlight since September when a leaked April 2025 project update to the WA opposition suggested the project was already one year late and $150 million over budget before a shovel had even struck ground.

That update was leaked nearly six months before the Iran war, but was brushed aside by Carey at the time, who said it was out of date and the newly formed Office of Major Infrastructure Delivery was effectively keeping the project at cost.

Shadow health minister Libby Mettam was unconvinced fuel prices could be blamed for any cost blowouts.

“How much of the budget had already been blown out before the Iran conflict began? It would be good to see and raise that question, given we know leaked documents last year exposed the fact that this government cannot manage health and cannot manage project delivery,” she said.

“What we would like to know is how much of these project budgets had already been blown out before the Iran conflict began.

“It is a convenient excuse for the Cook-Labor government to be hiding behind the Iran wall.

“We accept there will be additional costs, but we also know these projects had already been blown out well before this Iran war had even begun.”

The building hospitals fund was created in November last year for the government to purchase the St john of God Mount Lawley hospital, rebuild the Peel Health Campus and build a new block at Royal Perth Hospital.

The extra $500 million takes the fund to $2 billion, with Carey saying it could be drawn down for hospital projects.

Carey said the fund would see 900 hospital beds added to the system by 2030.

“We are in a record-breaking hospital building program, you’ve never seen it before in this state,” he said.

“Wherever you look across WA, hospitals are either being rebuilt or upgraded, like the Peel Health Campus, like the new build at Royal Perth Hospital, like the redevelopment at Geraldton Hospital, like the new build at Bunbury Hospital. ”