Wednesday, 15 October 2025

 John PESUTTO (Hawthorn) (10:10): I rise this morning to speak on the report on the 2024–25 budget estimates, which was published last October. If you look at every aspect of the financial mismanagement of this Labor government, everything stems from a lack of fiscal integrity and transparency in budgeting and the budget papers, which are supposed to tell the Victorian people and businesses, domestic and global, about the state of Victoria’s books and the government’s financial plans for the state. But you do not see that in the budget, and the level of integrity continues to deteriorate. What chapter 2 of the 2024–25 budget estimates report talks about in part is the level of contingencies, and that is what I want to talk about in my remarks this morning.

As people know, contingencies are always there. Traditionally they have been relatively modest amounts for outputs and capital programs, which are there to recognise things that are largely unforeseen. But what has happened now is that the government is abusing that opportunity to the point where tens of billions of dollars are hidden in contingencies for outputs and assets so the Victorian people cannot see what that money is going to be spent on. The government says the contingency funds for outputs and assets are there to recognise that there are some decisions it has made but not yet allocated the money for or policies it has made but not yet determined when they will be implemented, and that is not really good enough.

The government tries to say it hides these figures in contingencies because there are commercial-in-confidence considerations. But again, that is an unpersuasive and frankly unacceptable position for the government to take because transparency is too important and certainty is too important, and we need that certainty when it comes to understanding where the state of Victoria’s books are. In the 2024–25 budget estimates, nearly $76 billion was buried in the contingency funds for outputs and assets. That is more than two-thirds of the operating revenues of Victoria in that financial year. That is a substantial amount of money. We do not know and have no visibility into where that money is going to be spent, particularly at a time when we know that the government has said it will sign, for example, all Suburban Rail Loop East contracts. Yet in budget paper 4 it only has ‘TBC’ against the outward years of that project. It strikes me as passing strange that you can say you are going to sign the contracts with absolute certainty, yet you will not put in the budget papers those figures.

The Auditor-General in February this year published a report. It was a damning report saying that we as Victorians can no longer rely on the budget papers as a guide to spending. For anybody looking at the priorities around budget repair, which this government is not looking at, it is impossible to plan if so much money is buried, and hidden I would say, in the contingency funds. How have things changed since the 2024–25 budget estimates, when you had nearly $76 billion hidden in contingencies, to this year, the 2025–26 year? The answer is not much, because although there was roughly $76 billion hidden in the contingencies for assets and outputs in 2024–25, in this financial year, we still have around $66 billion buried. Between last year and this year, in terms of the total quantum of funds in the contingency program, it dropped by $10 billion roughly in terms of outputs.

On the output side of the budget, the government has committed about $10 billion of those funds. But for assets – that is, major projects and capital projects around our state – we still have buried in the budget papers huge amounts of money that are not accounted for, so $66 billion in a budget this year, with an operating revenue of a little under $110 billion at the time of the budget papers in May – a very substantial amount of money. That is why in October last year we released a policy that included things like a charter of budget honesty, a tracker of government expenditure, because we feel that you cannot embark on the road to fiscal repair and attract more investment in Victoria if so many amounts of funding that are huge in scope are buried in funds we cannot properly interrogate. That is why, under the Liberals and Nationals, we will begin that process of budget repair with more transparency.