Wednesday, 22 March 2023

Economy

David DAVIS (Southern Metropolitan) (17:57): (137) My matter also relates to the Treasurer’s area of responsibility. We have seen state debt increase massively under this government. The government took a deliberate decision in 2018, and just days before the 2018 election the Treasurer and Premier went out and said, ‘We’re going to lift state debt from 6 per cent of gross state product to 12 per cent of GSP.’ That proved very much an underestimate, because state debt grew much more than that and is growing much further. The recent budget update makes it clear that state debt is now well over $100 billion and climbing towards $165 billion or $170 billion by the end of the forward estimates period, when state debt in Victoria will be greater than New South Wales, Queensland and Tasmania combined.

This is a huge amount of cost to the budget because interest rates are now rising very significantly. The state is caught with the rising debt mainly due to the mismanagement of major projects. It is important to record that a lot of the debt occurred before COVID, and the debt situation was well committed through the major projects and the big cost overruns on a series of major projects. Whether it be the Metro, whether it be level crossings – you name it – all of the projects have blown out massively. The state was in deficit on 31 December 2019 – that is, before COVID. So the debt is there and it is climbing.

What I am seeking for the Treasurer to do in the upcoming state budget is to publish a special table that will outline how much debt each and every Victorian will need to carry and how much an average family will be carrying. That table should have a long tail on it backwards so that we can see back to the 1970s, the 80s, the 90s and forward how much debt was carried by each Victorian family. We should also on that table project forward the likely debt per family, per individual, per person in the state of Victoria into the future, in particular over the forward estimates period. It is going to be a very significant debt per person, and I think the Treasurer should be transparent about how much debt is being carried.

It is interesting that New South Wales has significant debt but its debt is not as great per person. Its debt overall compared to the size of the state economy is much less significant. The ratings agencies have recognised that. In New South Wales both the major ratings agencies have given a much stronger rating performance for New South Wales than Victoria and have singled out Victoria as the mendicant state, the state that is at risk.