The Victorian government should be declared a national disaster zone.
Victoria is the state with the highest taxes. It has the highest debt. It has the highest interest rate. And it has the lowest credit rating.
Victoria has the nation’s largest state debt (Source: Alex Joiner).
Last week’s state budget update revealed that Victoria’s debt is projected to blowout by nearly $180 billion dollars by 2027.
Victoria’s debt is now expected to cost taxpayers $24 million a day in interest, with Victorians facing the prospect of even higher taxes.
Ratings agency Moody’s is even more pessimistic, projecting arlier this year that Victoria’s debt would rocket by 85% in five years, from $122 billion in 2022 to $226 billion by 2026.
The Victorian Auditor-General also recently warned that Victoria’s debt could balloon to $256 billion by June 2027, and questioned why there was no real plan in place to manage the burden.
The blowout in debt comes as Premier Jacinta Allan made the reckless decision this month to sign first major contract pertaining to former Premier Daniel Andrews’ $200 billion Suburban Rail Loop (SRL) boondoggle.
The decision was against the advice of infrastructure experts and has locked taxpayers into the most expensive infrastructure project in history.
“This is really taking a generation’s worth of infrastructure funding and investing it all in one project”, the Grattan Institute’s Transport and Cities program director, Marion Terrill she said.
But Premier Jacinta Allan hit back at the long list of opponents to the SRL:
“We’re seeing plenty of blockers and knockers … when it comes to the Suburban Rail Loop”, she said.
“There are plenty of people for their own — mostly political — reasons (who) want to stop the Suburban Rail Loop”.
To add further insult to injury, the 10-kilometre North-East Link motorway will now cost taxpayers almost $26 billion, up nearly $16 billion from the initial price target.
So, that’s another $16 billion down the drain to go along with the countless billions that the Victorian Labor government has wasted.
The cost of the Metro Tunnel has blown out from $10.9 billion to $14 billion over its construction, whereas the West Gate Tunnel is now expected to cost $10.8 billion, up from its $6.7 billion initial projection.
In response to the new budget figures, Anthony Walker, S&P’s director of government ratings, said the cost blowout for the North-East Link was an example of why the agency had slashed the government’s credit rating.
Walker stated that there was “not a lot” of headroom in the financial projections that would allow Victoria to keep its AA credit rating, and that this may be jeopardised by further cost overruns.
“If the government was to broadly deliver what they put in the mid-year budget, it should be … consistent with an AA rating”, he said.
“The downside risk is we have seen North East Link already increase by 50% over its final costings”.
“While it’s early days for the Suburban Rail Loop, the cost escalations on North East Link show the inherent risks of such major projects. Particularly if you have a look across Australian capital cities, underground tunnelling projects have resulted in a large cost blowout across nearly all projects”.
“There’s a lot of debate over the costings of SRL. But given the recent history of nearly every major project in Victoria going well over budget, the risk here is that SRL will follow suit”.
“We have seen business cases come out with positive cost-benefit analysis on the proviso that costs are extremely low. And we have seen costs increase by 50% on major projects already and some of them are growing more than that”.
“That calls into question the use of taxpayers money, whether it’s being used in the most efficient places”, Walker said.
The vast sums squandered on Labor’s pet projects will leave Victorians mired with crushing debt for generations to come as its population explodes via endless mass immigration.
It will also leave Victoria short of funding for other worthwhile economic and social infrastructure, such as health spending:
Budget blowouts and record high debt are putting Victoria’s credit rating at serious risk of being downgraded. Health cuts are now being considered as the opposition calls for an urgent audit of the state’s major projects. https://t.co/5zYfOfGqUb @SharnelleVella #7NEWS pic.twitter.com/ebLWHmPxTO
— 7NEWS Melbourne (@7NewsMelbourne) December 19, 2023
And for what purpose? To meet former Premier Dan Andrews’ nefarious infrastructure ambitions and the federal government’s ‘Big Australia’ fetish?
