Victorian Premier, Dan Andrews, is clearly in panic mode over the state’s ballooning debt, which is expected to top $165.9 billion by 2026:
Victoria has the nation’s largest state debt (Source: Alex Joiner).
Only around one fifth of the $165.9 billion of net debt the state is projected to reach by 2025-26 can be connected to spending on COVID:
Rather, according to independent economist Saul Eslake, the blowout in state debt is mostly connected to the government’s decision to “embark on very big, largely debt-funded infrastructure spending programs”.
“All of those projects have suffered from cost overruns, as big projects almost inevitably do”, Eslake said.
Indeed, Victoria’s Auditor-General has raised alarm at the state’s prolificate and wasteful infrastructure spending (e.g. here and here).
Victoria also has the nation’s lowest credit rating, which is at risk of being downgraded further.
Worse, Victoria’s debt has ballooned despite the state government selling off a slew of public assets.
In May, the Victorian Government announced cuts in infrastructure projects in a bid to help pay down the state’s net debt. Hundreds of government programs also face the axe.
Now, The Herald-Sun is reporting that thousands of Victorian public servants are facing the axe:
“Ahead of May’s state budget all government departments were ordered to cut 10 per cent of ongoing staff, putting more than 5000 jobs at risk”.
“The move foreshadowed the biggest public service jobs cull in more than a decade – when former premier Ted Baillieu pushed to slash 3600 jobs”.
“The government hoped to wipe billions of dollars from its ballooning wages bill which increased from $24.2bn in the July 2014 to June 2015 financial year to $38.5bn in 2021-22”.
“Victorian Public Service Commission data shows the number of public servants increased from 34,000 to 55,000 (by 54%) between 2015 and 2021”.
Living standards will continue to worsen for Victorians.
According to the 2023 federal budget, Victoria will once again lead the nation in population growth, expanding by an astounding 694,000 over the five years to 2026-27:
Source: 2023 federal budget
In only five years, Victoria’s population will grow by 1.5 Canberra’s. This will require enormous additional investment in infrastructure and social services if living standards are not to degrade.
Thus, the Andrews Government’s cutting of expenditure at the same time as the state’s population balloons guarantees more congestion and reduced services for Victorians.
Crazily, Dan Andrews is still lobbying the federal government for more immigration and population growth into Victoria:
“I’ve always been a very strong supporter of more skilled migration”, Dan Andrews said in an interview last month.
“And the new federal government have taken some important steps towards increasing the amount of permanent skilled migration, but I think they might need to do more again”.
“Prime minister Albanese knows this. I’ve spoken to him about it personally and part of it also is clearing the Visa backlog”.
The Victorian Government has failed badly to provide enough public housing, infrastructure and services for the state’s ballooning population, while also plunging the state deep into debt.
Still, Dan Andrews wants even more immigration.
This would guarantee that Victorian living standards collapse.
