Wednesday, 25 May 2022

Public Accounts and Estimates Committee

Report on the 2020–21 Financial and Performance Outcomes

Mr ANGUS (Forest Hill) (10:26): I am pleased to rise this morning to make a contribution in relation to the Public Accounts and Estimates Committee’s Report on the 2021–22 Financial and Performance Outcomes. I note that this report was tabled in this place in April this year, and it contains 134 findings and 36 recommendations. I particularly wanted to focus my contribution today on chapter 2 of the report, which is entitled ‘Financial and economic performance’. This particular chapter in my view gives a very good summary position of where we are in the state of Victoria at this point in time.

I want to turn subpoint 2.2.1, which deals with the revenue, and that talks about the fact—it is there for all Victorians to see—that the total revenue has gone up by 8.9 per cent and is now at record levels. We can see that from that and over the page in figure 2.1, which breaks down the split of the record taxation revenue that is coming in here in the state of Victoria. And we can see just from these particular numbers that stamp duty is up by 4.6 per cent, payroll tax is up by 6.5 per cent and other taxes are up similarly as well—as well as obviously grants revenue is up as well. That is showing us what we have been saying and what all Victorians have known for a very long time—that we are living at the highest taxing time in Victoria’s history under this particular government.

If we turn over to page 12 of the report, subpoint 2.2.2 deals with the expenses, and again we can see there that the total expenses are 17.1 per cent higher than the previous year. That says to me and should say to all Victorians that this government has got absolutely no control over the expenditure side of its financial statements. And that is a great concern because in these difficult economic times we want a government that is restrained, that is managing these matters well, but rather what we are seeing is one that is basically running at a level that is clearly not sustainable. In particular it notes on that page that employee expenses accounted for 34 per cent of the total expenses, with $30 billion in 2020–21, which was 10.4 per cent higher than in 2019–20. So right there we can see that that is an expense that is running completely out of control—10.4 per cent higher than the previous year, despite the fact that there obviously were challenges and there were additional personnel involved. But we can see and the committee notes that at 30 June 2020 the Victorian public service workforce consisted of approximately 270 000 full-time equivalent employees, and that excludes COVID Quarantine Victoria. That is an extraordinary situation—and particularly so when we see that as a result of those additional people more people are getting paid more and we are getting less services.

We have currently got various crises here in the state of Victoria, not the least of which are the ambulance crisis, the 000 crisis and the whole hospital and health sector crisis. What that tells you is that we are not getting a good return on investment, so there are clearly some structural problems. There are clearly some fundamental problems that this government has presided over, bearing in mind that it has been in office almost eight years and clearly with the Premier in charge for that time, and of course for three years before that he was the Minister for Health, so he has had his hands on the levers in the health sector for that time and we are seeing appalling results for the community here in Victoria.

Figure 2.2 on page 13 shows in a graphical form the matter that I have just been referring to. We can see there very clearly the dramatic increase in employee expenses, which is something, as I said, that should be of significant concern to all Victorians. Paragraph 2.2.3 talks about the net result and says that the 2020–21 financial result net operating balance was a deficit of $14.6 billion, compared to a deficit of $6.5 billion in the preceding year. So we can see there that we have got things deteriorating significantly from the bottom-line position as well, and that is a result of the out-of-control expenditure that I just mentioned. But also it is despite the record levels of taxation, so we can see that we have got a government that is not managing the finances of the state very well, and that has now become clearly apparent in the recent budget papers. I will have more to say on that at another time, but I commend the report to members. It is very informative and contains some very sobering financial data, but it should be read by all.