Wednesday, 18 March 2020

Public Accounts and Estimates Committee

Report on the 2019–20 Budget Estimates

Mr ANGUS (Forest Hill) (10:15): I am pleased to rise and make a contribution on the Report on the 2019–20 Budget Estimates, and I certainly endorse the comments from the member for South Gippsland in his contribution in relation to this particular report. I want to just go through particularly chapter 2 of the report, which deals with the 2019–20 budget overview, and I want to touch on a whole range of points in relation to that. If we go to 2.2—

Mr Richardson interjected.

Mr ANGUS: Yes. I would like an extension, actually, but 5 minutes will have to do me. Point 2.2 on page 8 talks about the budget having net operating surpluses in each year over the next four years. Well, what a joke that has turned out to be. The fact is we have now seen—with what the financial statements tabled last Friday morning have shown—a year-to-date loss, a deficit, of $1.146 billion for the six months to December.

So we have had the Treasurer repeatedly say both inside and outside of this place that the budget will be in surplus, and clearly it is not. It has been a $1.45 billion turnaround over the previous equivalent period of time. And that shows the dramatic deterioration in the financial situation here in Victoria. And it augurs very, very badly, because the one thing we know in relation to the deficit already is that it excludes the impacts from the bushfires and of course from the coronavirus as well. So goodness knows where we are heading in relation to that, except it is all going to be downhill very dramatically.

If we look on page 9 of the report under 2.3.1, we can see the various analyses in relation to net debt. The net debt to gross state product ratio at 30 June last year was 5.7 per cent and at the end of December it was 7.6 per cent, so we have got a 24 per cent increase there just in that short period of time. Now, we know that the Treasurer is saying that is going to go up well over the double digits—or into the double digits, up over 12 per cent—but to see it rise so dramatically in that very short period of time is of great concern to all Victorians.

If we turn over to page 11, we can see under 2.4.2, under the ‘Risks’ section, we have got wages. And again the member for Gippsland South touched on this, but we can see what we have got here is that according to the report, the PAEC report, it talks about average wage growth of 2.2 per cent and the expectation being around that vicinity. But we can see that for the actual six months to 31 December 2019 wages grew by 7.7 per cent. So right there we can see the complete and utter loss of control in the budget, and it to a large extent rests around the issue of wages. And that is not unexpected; it is what we see every time Labor comes to power. They pad out the public service, they pad out things with their Labor mates that are not delivering frontline services but are sitting in tall buildings shuffling papers in some instances. And that is what is going to be a fixed overhead, like a millstone around the neck of all Victorians in relation to financial matters. So that is there for everybody to see—the fact that that has just blown out. If we turn over to page 19, 2.5.3 talks about taxation revenue, and it says:

State-based taxation revenue is expected to grow by 2.2% …

So what we can see there is in relation to the six months the actual figures have grown by 4.3 per cent. So that has virtually doubled the estimate in the first six months alone. So we can see the evidence, in incontrovertible form, that we have got the highest taxing, highest spending government that we have ever had here in Victoria, and I think there would be significant questions about what we are getting for our money. If we turn over to page 21, we can see some of the components of the tax revenue, including payroll tax. And the report says:

Payroll tax is expected to raise $6.5 billion … and increase by 4.5% per year …

In the six months to 31 December payroll tax alone has increased by 6 per cent, so it is an extraordinary increase. The grab on payroll tax just continues to go up and up.

There is a whole range of other expenses which I have not got time to go into now but hopefully will another time. But what this report shows is that the financial statements that came out last Friday indicate the budget is completely out of control in relation to this.