Last week, I reported how a raft of Victorian infrastructure projects were facing cuts in a bid to help pay down the state’s net debt, which is expected to top $165.9 billion by 2026.
Victoria has the nation’s largest state debt (Source: Alex Joiner).
Victoria’s debt blowout has arisen despite the state government selling-off a raft of state assets.
Victoria also has the nation’s lowest credit rating, which is facing further downgrade.
Over the weekend, The Age reported that hundreds of government programs are also facing the axe.
More than $17.2 billion in Andrews government program face potential cuts in Tuesday’s state budget, according to Victoria’s independent Parliamentary Budget Office (PBO).
Unless Treasurer Tim Pallas extends the initiatives, funding for the 372 programmes, which include road maintenance, domestic violence, and disability help, would expire on June 30.
“It is difficult, often impossible, to determine whether an initiative … with funding to 2022-23 would continue to receive funding beyond that year. Some of these initiatives may have lapsing funding”, said the PBO report.
“It is difficult to track such changes to initiatives that are not headline or large programs”.
Commenting on the PBO findings, shadow treasurer Brad Rowswell said billions of dollars in vital community services are “all on chopping block in what will be a horror state budget”.
“When Victorian families need cost of living relief and better services, the Andrews Government will hit them with higher taxes, job cuts, and reduced services and infrastructure”, Rowswell said.
“Victoria needs an end to the culture of debt, waste and incompetence; that have become hallmarks of this Government”.
Melbourne has been the fastest growing Australian city this century, adding an insane 1.6 million residents (45% growth) since 2000.
This extreme population growth has required massive investment in infrastructure and services, which is now drowning the state in debt.
Victoria is a prime victim of the federal government’s mass immigration program and the political system’s vertical fiscal imbalances.
Because the Commonwealth receives more than 80% of total tax revenue in Australia, the states are constantly starved of funding for social services and infrastructure.
Thus, the federal government’s high immigration-driven population expansion imposed on Victoria (Melbourne) has left the state budget severely underfunded, which, combined with inefficiency, has sent Victoria’s debt skyrocketing.
For Victorians, things will only get worse.
According to population predictions in the most recent federal budget, Victoria will once again top the nation’s population growth, increasing by an astonishing 694,000 during the five years to 2026-27:
Source: 2023 federal budget
In only five years, Victoria will grow by 1.5 times the population of Canberra, which will require massive further investment in infrastructure and social services.
As a result, Victoria will spend countless more billions on expensive projects and services that would not be necessary if not for the excessive immigration-driven population growth thrusted upon the state by the federal government.
I’m sure the Albanese government would be lot less enthused about immigration if the financial costs had to be shared with the states.
