Several years ago, WA was the nation's strongest economy in the middle of Australia's greatest mining boom but it has now unveiled its highest ever deficit and debt.

The WA government recorded an operating deficit of $2.02 billion for the last financial year and net debt of more than $27.3 billion, both record figures.

Labor Opposition Leader Mark McGowan on Thursday described it as shocking reading for West Australians and appalling economic financial management by the Liberal-National government.

However Treasurer Mike Nahan said the government had worked very hard to achieve the lowest expenditure growth two years in a row at 2.4 per cent in 2015-16 and 2.2 per cent the year before.

The deficit and debt was lower than the government’s own estimates delivered in the budget last May of $2.7 billion and $31 billion respectively.

The figures were blamed by Treasury on a series of factors: top of the list was an unprecedented two straight years of “revenue shock” – which meant less money from the key WA income earners of iron ore and natural gas due to plunging prices.

WA’s shares of the nation’s GST grants declined by $377 million – or 16.7 per cent – and was the lowest in the nation for a second consecutive year.

“Despite the limited growth in spending, the severity of the downturn in the state’s revenue resulted in an operating deficit in 2015-16,” Treasury said in its annual report on state finances released.

Dr Nahan said the government had done well in curbing spending growth to a level well below where it was when it won the election against the Labor government in 2008.

“Contrast that expenditure growth with the Labor government – it was over seven per cent per annum and in the last year of the Labor government was growing at over 10 per cent,” he said in parliament.

There has been a temporary hiring freeze and voluntary redundancies in the public sector.

“The increase in borrowings is required to fund essential infrastructure … and was pushed higher in 2015-16 by the revenue downturn,” Dr Nahan said.

Mr McGowan criticised the government for letting net debt climb by $4 billion in the past year, or nearly $11 million a day, with massive interest payments on top of it, which he said was the cost of a primary school.

“It’s a joke to pretend these are good figures, these are shocking figures which show how chaotic this government is,” he told reporters.

He said the government should have spent more cautiously during the mining boom in case commodity prices fell, as they did.

The government had a long list of multi-million dollar cost blowouts, he said, including the Ord River irrigation scheme last week and certain electricity, health and IT contracts.

The state government is currently debating legislation to pile on an additional $1.7 billion in debt, without which it will run out of money by the end of October.