Government claims opposition policies would create $11 billion budget black hole
Finance Minister Danny Pearson said the opposition’s proposed tax cuts would leave the Coalition government with “zero gap” in investing in the infrastructure needs of a fast-growing state.
Wilson said the modeling is flawed in many ways. He said the opposition would abolish the Emergency Services and Volunteers Fund but reinstate the Fire Services Property Tax, which it replaced. He said this would cost the budget just over $3 billion, not the $7 billion in government modelling.
Shadow treasurer Jess Wilson says government modeling is “deeply flawed”.Credit: Christopher Hopkins
He said the Parliamentary Budget Office had independently calculated the cost of the opposition’s stamp duty changes to be half the figure claimed by the government model, and that the Coalition government had no intention of freezing government taxes.
According to the opposition’s costings, the total impact of tax policies on the budget is around 5 billion dollars.
“This is nothing more than a bizarre, desperate and deeply flawed attempt by the Labor Party to distance itself from its own shocking record of fiscal mismanagement,” Wilson said.
“Labour knows the highest tax regime in the country is hurting Victorians and our economy, but they have no choice but to continue squeezing money out of hard-working Victorians while net debt grows by $2 million an hour.”
The government modeling is based on budget figures and previous public statements made by the opposition, including a budget response speech by Wilson’s predecessor James Newbury, a social media post by Opposition Leader Brad Battin and a recent media interview by former Liberal leader Matthew Guy.
The government’s attempt to shift scrutiny to the Coalition’s tax promises reflects pressure, particularly from business and property groups, as it seeks to return the budget to a operating surplus for the first time since the pandemic.
This imprint has previously reported that the government is struggling to secure cross-border support for a proposed expansion of the congestion tax, a scaled charging system for inner-city and intra-city car parks.
Although the proposed tax would only add $85 million a year to the budget, it is one of two additional revenue measures noted by S&P Global Ratings in July when it confirmed the state’s AA credit rating (the lowest of all Australian states).
S&P analyst Rebecca Hrvatin said the rating was based on the state government “running a continuing cash operating surplus and showing fiscal restraint.”
Loading
“We think Victoria’s commitment to controlling operating expenses, delivering promised cost savings and slowing debt growth is important,” Hrvatin said.
“Government efforts to rebuild fiscal buffers have been weak. The government tends to spend any revenue windfalls it receives and also appears to be struggling to implement previous austerity measures, such as workforce reductions.”
Symes’ most ambitious attempt at budget savings will come in his response to former senior bureaucrat Helen Silver’s plan to cut the size and cost of Victoria’s public service. The silver report and the government’s response are expected to be made public in December, along with the mid-year budget update.
Get the day’s breaking news, entertainment ideas, and a long read to enjoy. Sign up to receive our Evening Edition newsletter.
