Thursday, 4 August 2022

Interest rates

Mr DAVIS (Southern Metropolitan—Leader of the Opposition) (10:46): Today I want to draw the house’s attention to the very significant interest rate rises that we have seen in recent months. Indeed on Tuesday there was another 0.5 per cent rise in the overnight cash rate by the Reserve Bank, lifting the total increases in the recent period to 1.85 per cent. These are very significant increases. They not only hit small businesses and families, those who have got significant mortgages, but they also clobber the Victorian state government and our budget—the Victorian budget. Labor has left us with a massive debt overhang, and this debt is out of control compared to other states and territories. It is clear—even on the budget figures that are now well out of date—that by 2025–26 the debt in Victoria will be $167.5 billion, greater than New South Wales, Queensland and Tasmania combined, to give some context. The increases that we have seen from the sensitivity analysis in the budget of a 1 per cent shift in interest rates over four years is likely to clobber the budget by about $2.55 billion. We are likely to see something north of $4.5 billion in the hit on the state budget. That is going to really put pressure on the budget. This is the terrible debt legacy, the debt timebomb, left by Daniel Andrews and Tim Pallas, amongst the worst economic managers in the state’s history.