In case we ever doubted it, this week’s budget made clear that months of Labor leaks on the state’s upcoming ‘Horror Budget!’ were nothing more than expectation management. Tim Pallas clearly designed his speech – which by and large lacked shocks – to seem like ‘business as usual’, and in all honesty it is hard to disagree. The problem is, after a decade of budgets from this Treasurer, we know what ‘business as usual’ means: Victorians will pay more, and get less.
It is shocking that we are not more shocked, but we’ve become numb to it. The headline figures are bad enough: total debt will rise consistently, from $156bn next year to $187.8bn by 2028. And the annual debt interest bill will surge accordingly, from $6.5bn at present to $9.4bn by the end of the forward estimates. Every single week the Victorian taxpayer will part with $180m and receive not a single cent’s worth of services or infrastructure in return.
A decade of budgets from Mr Pallas has culminated in this: spending more, but delivering less. This is what happens when a Labor government sells out the economy to create a public sector client state: even this so-called ‘disciplined’ budget shows the government wage bill rise inexorably from $38 billion to $42 billion.
This is what happens when Labor politicians – short-term populists – do long-term harm, indulging in vast overspending on multiple infrastructure schemes, thus increasing each project’s cost and causing mismanagement and blowouts of epic proportions.
This is what happens when energy costs spiral, land and payroll taxes escalate, when employment costs rise, and when regulation multiplies.
As the old saying goes, ‘If all you have is a hammer, everything looks like a nail.’ And so it is with Labor: any problem, real or political, must be solved by government, be it through new consultation, committees, commissioners, qangos, regulation, or legislation. Last year’s budget saw state revenue reaching $99.9bn by 2026-27 – but the Treasurer has confirmed Victoria will now break the $100bn barrier by 2025 – and hit $107bn by 2027.
Labor politicians love to boast about spending, but this big growth of big government is nothing to be proud of. It is built on the backs of hard-working, enterprising Victorians, and one day those backs will break.
The simple truth is that despite worse health services, longer court delays, police shortages and underfunded schools, Victorians will pay more. State revenue from taxation will rise from $32bn last year, to $45bn in 2027-28. That is a 40 per cent rise in 5 years, there in black and white – staggering, unsustainable, terrifying.
Nor can Labor claim this will only hit those who can afford it: the fire services levy (up from $847m to $1.43bn) and the municipal waste levy (up from $64 to $170 per tonne) are not discretionary spending – every household will pay, rich or poor.
And at the very heart of this budget is a bigger problem, a fiction which underpins the Treasurer’s strategy, and the only way he’s disguised the car crash in Victoria’s finances. Tim Pallas believes the state’s economy will grow by a quarter, in four years! That’s not just fanciful, it’s practically fraud. Yes, the public wage bill will grow, and so too will taxes – but does anyone truly believe the economically productive private sector can possibly achieve the growth his fantastic predictions require?
Even with this make-believe, Labor have had to seriously massage the cash flow. The budget papers show project after project with spending re-profiled, work delayed and delivery dates blown out. The Melbourne Airport rail link is deferred four years further, the government-operated childcare program is delayed, 29 school upgrades are slowed down, as is the launch of 60 mental health centres and ten community hospitals.
And the cost of one part of the Suburban Rail loop has completely disappeared from the books. It’s now ‘to be confirmed’, despite the fact contracts have already been let. Perhaps this disappearance is just as well. We all know we’ll be zipped around in autonomous flying cars before the SRL gets built, and teleporting before it’s paid for!
Mr Pallas’ ‘business as usual’ budget extends to his customary neglect for regional Victoria. Funding allocated for agriculture programs drops 30 per cent, and the list of infrastructure projects is seriously underwhelming. Little is new, an awful lot delayed, and some projects even cancelled.
The Geelong Fast Rail project still featured in last year’s budget. Now the government at least acknowledges its axing, but there’s no sign of the $2bn the promised to Geelong re-allocated to other projects. It’s just another broken promise.
The truth is that Tim Pallas’s tenth budget was pretty uninspiring. For most Treasurers that’s actually high praise. But the problem is that in Victoria boring ‘business as usual’ doesn’t mean an inoffensive, hands-off government, leaving us to our own devices. Instead, it means the unremarkable continuation of a decade of higher spending, higher taxes, and higher debt; of the same old boasts, and the same old excuses; and the same inevitable course to a poorer, harder, future reckoning.
