Wednesday, 22 June 2022

 Mr ANGUS (Forest Hill) (10:08): I am very pleased to rise this morning to make a contribution on the Public Accounts and Estimates Committee Report on the 2020–21 Financial and Performance Outcomes, which was tabled in this place in April of this year. I particularly want to focus my comments this morning on chapter 2, which deals with financial and economic performance. I turn firstly to page 22. It talks there, under 2.4.2, about labour market performance. It notes that employment in Victoria declined by 1.1 per cent in 2020–21 compared to the previous year, and it goes on to say that the unemployment rate in 2020–21 was 6.2 per cent, which was 0.8 per cent higher than the previous year. The finding on page 25 says:

Population growth has previously been a significant driver of Victoria’s economic growth. In 2020–21 Victoria’s population declined by 0.7% compared to the forecast growth of 0.2% outlined in the 2020–21 Budget.

Right there we can see that that is a significant issue for the state, because at the time when these figures came through the full revelation in relation to the number of people leaving Victoria—in fact fleeing Victoria—was not apparent. That is now apparent, and, as we know from figures released recently by the ABS, there are estimated to be about 60 000 people that have left Victoria. I expect that that will continue to increase, probably at a dramatic rate, because I would imagine there probably is no-one in this chamber today that would not know of someone that has left Victoria—fled Victoria—to get away from the draconian restrictions that we have had over the last couple of years. That is going to be a significant issue for the state as we try to rebuild and recover the state. We can see that now with the tremendous shortages in terms of job opportunities for people. Most employers are struggling to get people, particularly in the hospitality area. It is a significant issue in Victoria.

If I turn to page 26, under 2.5, ‘Fiscal strategy’, table 2.3 talks about the Victorian government’s four-step plan for 2020–21 and the status of that plan. I just want to go through those four steps, because what this indicates to all Victorians now very clearly is that of the four steps that the government has put out there in the public domain and has sought to achieve all have been an abject failure. So we can see step 1 is titled ‘creating jobs, reducing unemployment and restoring economic growth’. Well, we know that that is a failure. As it says in this report under 2020–21, the gross state product has decreased by 0.4 per cent and the state final demand has decreased by 0.8 per cent. We can see that that state final demand is continuing to decline, and that has got implications for the state for a range of reasons. I think these figures will ultimately look good compared to what we are going to be experiencing in the very near future, it is sad to say. Part of that is going to be driven by what I just referred to in terms of the decreasing population and people getting out of the state of Victoria and closing their businesses here in Victoria as well.

Step 2 talks about ‘returning to an operating cash surplus’, and we can see that that is a complete and utter fail. That is particularly apparent not only if we look at that figure that is reported in there—there is a minus $13 billion figure—but if we look at the budget that was recently handed down. In budget paper 2 on page 5 it gives the ‘Net cash flows from operating activities’, and we can see that that is going to continue to be in deficit for quite some time. There are some modest surpluses recorded for 2022–23, 2023–24 and 2024–25, but the reality is that the likelihood of those cash surpluses being achieved is going to be extremely limited because we know that the net results from transactions—the actual deficits there—as history will always show with Labor governments, will continue to be understated. So that will flow through also into the cash flows for the state. That is going to be perilously bad for the state, because not only will we have increasing debt, we will have increasing deficits and we will have cash flow going south as well, so we are not even going to be covering our cash flow requirements at that stage. The 2022–23 budget shows an expected cash surplus of $1.3 billion, but that is very unlikely to be met.