The West Australian Government could lose as much as $1 billion in revenue this financial year if the value of the Australian dollar continues to rise.
When the government brought down the May budget its projected revenue was based on a dollar value of 68.50 US cents.
The dollar is currently worth about 90.36 US cents.
Export contracts are typically written in US dollars which means when the value of the Australian dollar rises, export values fall.
John Nicolau from the WA Chamber of Commerce and Industry says if the dollar keeps rising, the government could lose as much as $1.3 billion in royalties.
"It is a material and significant impact on the budget," he said.
Mr Nicolau says the government needs to rein in spending.
Opposition treasury spokesman Ben Wyatt says the Government should have managed its funds better.
"They knew the Aussie dollar was going to be volatile over the next few years," he said.
Mr Wyatt says households and businesses will be forced to foot the bill.
He predicts increased fees and charges, as well as increased taxes.
The State Government says the value of the Australian dollar is beyond its control.
