Economic hawks eye restraint in pre-election budget
A state treasurer has been urged to ditch his usual pre-election budget tactics because of rising healthcare costs and debt.
More than $2 billion in spending measures have been announced ahead of Tuesday’s Victorian budget, including free and half-price public transport and discounted vehicle registration.
Victoria is on track to accrue $192.6 billion in net debt by mid-2029, taking the state’s daily interest bill to more than $28 million.
Victorian Chamber of Commerce and Industry chief executive Sally Perde said the top business community was not opposed to easing costs of living but said it was not targeted enough.
“If we continue to spend this, we won’t be able to pay our debt and if you can’t pay this then businesses and Victorians will be taxed more in the future,” he told AAP.
“We didn’t have this significant of a debt when we went into COVID…basically the cupboard is bare.”
Ms Curtin said the business’ slogans of “anywhere but Melbourne” and “anywhere but Victoria” were not a media fabrication but rather had been passed on to her by members and interstate counterparts.
“They (other states) are enjoying investors coming their way who would otherwise come to Victoria,” he said.
“This is very real.”
Analysis by the e61 Institute, an independent think tank led by former productivity commissioner Michael Brennan, shows Victoria’s interest repayments have doubled from 0.6 per cent of gross state product to 1.2 per cent since 2019.
Health expenditures increased from approximately 4.25 percent of GSP to five percent in this interval; The cost of treatment for each patient in Victoria has risen above the national average.
“Victoria is not broke, but she is increasingly stuck,” the e61 Institute said in its report.
“The financial situation is weak and the room for maneuver is limited.
“Treasurer (Jaclyn) Symes has the unenviable task of delivering a budget that maintains a credible fiscal trajectory, repairs past fiscal damage, and deals with the health and hospital juggernaut.”
As Victorians face another cost-of-living shock ahead of November’s state election, the think tank has argued current challenges require a change to past budgeting habits.
“This is certainly not the time or place for the usual pre-election playbook.” he said.
In December, the mid-year budget update predicted Victoria would post an operating surplus of $600 million this financial year and $1.9 billion next financial year.
Prime Minister Jacinta Allan reiterated on Monday that surpluses will not be ignored and budget papers will show net debt reduction as a share of the state economy.
Ms Allan said Victoria would use the “power” of the budget to ease the suffering of hard-pressed families.
“No Victorian can control what’s going on in terms of Donald Trump’s war in Iran,” the Prime Minister told reporters.
“But we have to recognize that this has a real and material (impact).”
Teacher strikes planned to begin this week to coincide with the release of the budget were postponed for two weeks on Monday as the education union and the Victorian government inch closer to a pay deal.
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