Wednesday, 17 June 2026

 John PESUTTO (Hawthorn) (11:19): I rise to speak on the 2024–25 financial and performance outcomes tabled in this house in late March, and in particular chapter 2.2, which deals with the government’s fiscal strategy, so called. I seize on the fiscal strategy because that seems to be the blueprint that this government is relying upon to try to assuage the community’s justifiable and well-placed apprehension at the direction of our economy and the state budget, by trying to assure them there is a plan to get out of the spiralling debt and the mounting interest payments.

It is regrettable to reflect that the government is failing on all five elements of its fiscal strategy. The first one deals with economic growth and unemployment. We know that in the 2024–25 year economic growth in Victoria came in at just a little over half of what the government said growth would be for the 2024–25 year. That alone puts a real question mark on the government’s ability to say that net debt as a proportion of gross state product (GSP) is actually stabilising or coming down – it clearly cannot. For an economy that was over $650 billion in 2024–25, if growth has come in at half, you cannot say that all the other assumptions and forecasts are sound. They would have to be reviewed, and yet the government has not done that.

Unemployment – well, that is a very sorry tale, because unemployment in Victoria is higher than any other state, and it has been that way for many, many months. When it comes to the operating cash surplus and the operating surpluses, they are (1) wafer thin but (2) omitting the big piece which is driving so much of our debt problem in Victoria, and that is the infrastructure spend, which the government has not managed prudently on behalf of Victorians at all. Not only have we seen major projects delayed, we have seen them come in well over budget. I will not rehearse all of the well-placed arguments we have been articulating on CFMEU corruption, but it has not just been CFMEU corruption and misbehaviour, it has been total mismanagement. The procurement delivery models that the government has used have meant that Victorian taxpayers have been on the hook for all of these blowouts on major projects.

When it comes to stabilising net debt levels and net debt as a proportion of GSP, as I alluded to earlier in my remarks, we can see that net debt is actually, despite the government’s figures, not coming down as a proportion of GSP. I wanted to mention those figures and those matters because we sit in a context where we face this mounting challenge where our debt is not just a huge and growing number sitting off to the side there, it is driving an increasing amount of interest payments that the government has to fork out to service that exploding debt. Think about every $10 of revenue, not just now, but let us take the 2029–30 year. If you take $10 of operating revenue that comes in, you would set aside about $3 or $3.50 for health and you would set aside about $2 or $2.50 for education – it would be higher if the government actually met our Gonski obligations. And then after the $2.50 and $3.50 – $6 – basically you would have about $4 left. What I want to say is our interest bill is so high that of that remaining $4, $1 out of every $10 in 2028–29 will be devoted to servicing interest costs on behalf of that debt, to service that debt. That leaves only $3 to fund police; our courts system; our child protection system, where we see more kids in child protection today than four years ago and certainly more than there were 12 years ago when this government came to office; our roads; and our other infrastructure. It all has to be funded out of that $3. If we do not get debt under control, we cannot reinvest in those services. That is why we are committed to fixing Labor’s mess, making sure we can repair the budget so we can invest in the frontline services Victorians need and deserve.