Thursday, 19 June 2025

Budget papers 2025–26

Second reading

Debate resumed on motion of Gayle Tierney:

That the bill be now read a second time.

And Jaclyn Symes’s motion:

That the budget papers 2025–26 be taken into consideration.

David DAVIS (Southern Metropolitan) (11:32): This the annual appropriation bill. It is obviously a very important bill. It lays out the government’s plans, the government’s allocation of resources, and in doing so it is a reflection of the government’s priorities. I want to start off with one number which dominates all other numbers, and that is $194 billion. That is the debt at the end of the forward estimates period. It is a gigantic debt. It is bigger than New South Wales and Queensland combined. It is a debt that will act as a millstone around the neck of Victorians and Victorian children in particular as we go forward. The $194 billion debt that is planned for our state by this government is a reflection of the fact that it has lost control of the budget.

I want to just step back through some debates we have had in this chamber in recent times. One of those debates looked at the government’s control of debt, its removal of a debt ceiling, and we stepped through some of the key issues here. In the early 2000s the Bracks government, with Treasurer Brumby at the time, introduced a debt ceiling of 6 per cent of GSP – gross state product. That was a ceiling that the Bracks government and the Brumby government and the Baillieu government and the Napthine government were all content with. They were able to operate within that and were able to, through that process, deliver on significant infrastructure spending and do that with real aplomb and the ability to support the growth in the population. Then the Andrews Labor government came to power. It too was initially content to live with that 6 per cent GSP debt ceiling, until the week before the 2018 election when we saw the then Treasurer Tim Pallas and Daniel Andrews, the then Premier, out saying they were going to double the debt ceiling to 12 per cent of gross state product. This looked at the time reckless. Even their appearance, even the way they announced this, looked reckless, and so it has proved. Twelve per cent of GSP was the initial target. A little later they just abolished that target itself, that ceiling that had been put in place – a doubled ceiling that had gone from 6 to 12 per cent and then was completely removed.

We also know that the state government has tried repeatedly to blame COVID for the debt. But of course that decision to increase the debt ceiling was taken years before COVID, and the surging debt was already in evidence before COVID. The Auditor-General’s report of a year or so ago makes it very clear that only a small percentage, about 19 per cent of the debt, relates to COVID. The rest of the debt relates, in biggest measure, to the overruns in major projects and to huge infrastructure spending and the massive debt that has been incurred by the increases in the cost of projects. It is not even the initial cost of the projects, it is just the surging overruns in projects, now more than $48 billion – $48,000 million – in cost overruns by this government. That has all been added and added and added to the debt like a credit card that is out of control. The state government has not been able to manage this, and we now see Victoria with debt surging to a very high level of $194 billion – and that is the government sector debt. When broader debt is counted, it is an even greater figure and likely to attract ongoing attention by the ratings agencies. We see publicly that they are highly interested and exercised about Victoria’s position and its potential capacity to struggle with these enormous figures. We know that the Treasurer has been jetting around the world, meeting with officials from the ratings agencies in New York and elsewhere, and in doing so going cap in hand to explain why Victoria’s position is so serious, so worrying, and in essence trying to convince the agencies that Victoria is still a bet worth backing, still a horse worth backing. I can see why the agencies would be concerned, and I can see why the government and the Treasurer in particular will struggle so hard to convince them.

One of the ways the government has convinced the agencies this year is by bringing in a big spanking new tax, and that is the emergency services tax. It is a shocking tax. It is a new tax on every household, on every business, on every farm. In my area in Southern Metropolitan Region, the truth of the matter is that the increase in taxation that is going to be visited on people will be very significant. People will pay between 60 and 100 per cent more for this than they would have for the old fire services levy. If you run a commercial business, it is even greater. For a commercial premises, it is even greater. If you run a farm – as has been pointed out in this chamber at length when we had the debate – that is a much greater increase again. But make no mistake, the government will take between $700 million and $800 million a year extra out of the community, and it will do that by this big spanking new tax. The truth of the matter is that this government tried to say there are no new taxes with this budget. Well, the tax came in just a couple of weeks before the budget, and the impact of that tax will be very significant. There have been more than 60 new and increased taxes under this government, and there will be a whole series of further increases on 1 July. There are increases proposed in my portfolio area of resources and energy and new charges being applied for exploration and permits, massive increases in these – a 234 per cent increase in permit fees for resource extraction. For example, a quarry will need permits. They are going to increase the cost of those permits by 234 per cent. Those costs are of course fed straight into the inputs that are used for construction of government projects, private projects or indeed private housing. Why would you want to jack up the inputs for private housing construction at this time when we are actually trying to see more houses constructed? It is illogical, and it does not make sense. This government, through their imposition of new taxes, new charges, new fees and new levies – they have got every name under the sun for these new charges – are crushing the economy slowly. They are making it more difficult for Victorians.

One of the things I want to point out here is the state government has got a growing economy in Victoria principally because we have significant population growth. And that significant population growth means the economy is inevitably larger than the year before. But income per head and income per household has for a number of years now been falling under this government. So that is a diminishment, a fall, in the standard of living of everyday Victorians and everyday families. And they feel that cost-of-living impact, and they feel it very directly. They feel the day-to-day costs are going up. Now, there are other factors. Of course there are other factors in the overall cost-of-living position. Some of them are federal and some of them are international, but a substantial cause of the increase in the cost of living for Victorians is the higher taxes and higher charges that are levied on Victorian businesses and the higher taxes and higher charges that are inevitably passed through the economy in those increased prices and charges that people feel at the supermarket or with their energy costs – all of those are sectors where we have seen impacts and cost increases that have hurt everyday Victorians. And this government is into another round through the emergency services tax. It is into another round of tax, another round of clobbering Victorian households and businesses.

It is no wonder when you talk to senior businesspeople in this state, when you talk to business organisations or when you talk to the Victorian Chamber of Commerce and Industry or AIG senior members that they are very worried about Victoria. They are very, very worried about Victoria and its future, and many major firms are looking at other jurisdictions as options, either overseas or interstate. The loss of that investment into Victoria in the long run will have a devastating impact. It is in fact due to the culpability of this government, the failure of this government, to actually put in place a proper system, a proper way forward, that can deliver these services and the infrastructure that is needed in a cost-effective way.

This is the other side of the budget story in Victoria. There are massive increases in taxes, massive increased tax collections, whether you look at land tax, whether you look at stamp duty or whether you look at payroll tax. In all of the major taxes it is up and up and up as Victorian families and businesses are clobbered by these increases in taxes. But on the other side of the equation over here, which is the service delivery side of government, we have seen this government failing increasingly, whether it is in education with declining output and results for many of our students or whether it is in health, where we have seen waiting lists explode out past 80,000 and 90,000 but come back down to about 65,000. That is a huge number of people on the waiting list. That does not pick up all of the people on the waiting list, because there is a prewaiting list. But I want to be clear: when we left government in 2014 the last four-year figures for the waiting list in Victoria was around 38,000. It is now north of 65,000. That is a huge increase. That is Labor not getting on with it, that is Labor failing to deliver and that is Labor’s incompetence. Do not think this is COVID either. The waiting list was surging upwards BC – before COVID.

Health, education and transport – we see in transport that the performance of the system has not been up to scratch. The only time that the government has met its benchmarks with transport performance has been in the period of COVID. Once we came out of COVID they again were failing and have continued to fail to meet the benchmarks that are required and that are set out. If you look at the court infrastructure backlog, the government is not delivering the upgrades that are required there. The times to get to trial for the Supreme Court, for the County Court, for the Magistrates’ Court and for VCAT are all far, far too long and have gone out further. The time periods are greater now under Labor.

This is the story with Labor. They tax more, they tax harder and they tax more cruelly. At the same time they fail to deliver on the other side. They do not deliver the services that are required. They do not deliver the childcare services that are required. They do not deliver the health services that are required in a timely way. We have heard in the last few weeks the shocking stories from some of our hospitals, principally the Northern Hospital, of the doctoring of the waiting lists. I asked the Treasurer this in the chamber the other day: how can you stand there with your budget when you know that a number of these health figures are at best suspect but actually likely doctored and are seriously underestimating the crisis that we have in our health system? We have got to have basic honesty and transparency in a budget. If you have got a major set of suspect figures, in this case specifically the transfer times of ambulance patients into the emergency departments at our major hospitals, you would be worried – you should be worried. It is not good enough that you cannot attest to the quality of the figure work. If that figure work is shown to be wrong, I think Victorians can be very angry.

The government initially said, ‘We’ll do an investigation with the Department of Health.’ That was clearly completely and utterly unacceptable, because the Department of Health is the agency that is responsible for the results. Northern Health is an agency that is administered through the Department of Health. It was like the Department of Health was checking its own homework, and we all know what happens when that occurs. If you wanted some proper assessment, you needed to go out externally. The government was very, very resistant on that. I noticed yesterday that the Minister for Health in the lower house, under pressure with questioning, actually relented and said there will be an independent investigation. We now know Ernst & Young will do that work, and I would be interested to know who at Ernst & Young is doing that work and what the riding instructions are for that work and what the guarantee of independence is for that work. I say that we actually need clear and strong independent oversight, and we need an investigation that we can be confident about, so the government needs to come clean with some more details on that point.

As I say, the performance in the health system has been shocking. We have heard cases talked about in the chamber today and questions that have been asked over the recent period about cases where the ambulance has simply not got there at all or not got there in a timely way and people have died. This is the result of an incompetent government, a government where standards have slipped and a government where performance outcomes have slipped badly. The government appears to be, I do not know, unworried about the fact that people have suffered because of the poor performance of parts of our health system. I do not blame the doctors, the nurses, the paramedics and the others who are trying to do their best in the system. It is the state government who has got the oversight, the state government who has changed the rules, changed the arrangements, changed the delivery and seen poorer, worse outcomes as a result.

When you look at the performance part of the budget measures in that performance document – the old budget paper 3 but with the expanded performance document, with the bigger size – you look across so many portfolio areas, and the outcomes are not up to scratch. Even in my own portfolio area as the Shadow Minister for Energy and Resources, I look at the outcome there, and the outcome actually is higher costs and less reliable supply. Even some of the budget measures that have been put in place by the government are not being met. The rollout of batteries in a number of places is slower than it should be. The rollout of neighbourhood batteries has not been delivered at the pace the government intended. Again, this is the failure of the government to do the background work, to predict how it is going to roll things out and do things in a timely way and actually deliver the outcomes that are required. But if those batteries are late, that is a problem for the state. That is a problem, and the state government appears to have no response to that. I spoke earlier in the chamber today about Mr Richards from the energy union and his points about the risk with energy in our state. I think he made a number of very sensible points. He is obviously a very sincere and thoughtful unionist and is prepared to make strong points, on behalf of his members obviously but also on behalf of the Victorian community, and he has pointed to the failure of the minister here in Victoria.

Wherever you look in the energy portfolio you see this government, this minister, struggling. If you are talking about offshore wind – I met with some proponents of offshore wind the other day. You know, where is the government’s approach to offshore wind? When is this going to come forward? It is clear that the construction side of offshore wind is in some trouble in Victoria. It is clear that the government’s plan – and, you know, it is a bit more than a plan; they were out there spruiking this very hard before the 2022 election. We saw Lily D’Ambrosio and Melissa Horne down outside the Port of Hastings, promising that the offshore wind would be constructed there, but they seemed to not have any grip on the fact that there was a planning and approvals process that included the EPBC – the Commonwealth approval process, the Environment Protection and Biodiversity Conservation Act 1999 process. Tanya Plibersek, who is no friend of Victoria, I might say, has scotched that project, knocked it on the head as not meeting – and transparently and obviously not meeting – the basic requirements. Who would have thought that trying to put a major construction approach for offshore wind next to a Ramsar wetland could run into any trouble. Who would have thought. I just do not understand this government’s approach on a lot of these things.

We have got other problems in the budget. As you dig deeper into the budget you get the very clear issues with sections like the Suburban Rail Loop. There is no detailed figure work there for the Suburban Rail Loop – there are a lot of TBCs – and this is a major problem. There is no clear revenue source for the Suburban Rail Loop. The government says they are going to use value capture, but $11.5 billion, $12 billion or $12.5 billion of value capture is a hell of a lot. We saw the minister a day or so ago in response to questioning certainly not ruling out a congestion levy in the Suburban Rail Loop areas. The damage that is being done to our state’s reputation by the government’s approach to a number of these major projects cannot be taken lightly. We need to be very clear: the government has not delivered for Victorians.

When we come to other major projects, we are way over budget on the Metro Tunnel. The government says the Metro will be up and running later this year. Well, let us hope that is the case. The Metro will be probably $5 billion over budget, maybe more. That is a huge increase. A project that started at $9 billion and is now nearer to $15 billion, and probably even more, is a huge change. So all the business case work that is done on one figure is out the door when you see this massively increased figure. The disruption and the outcomes had better be pretty good. But it is clear the government does not seem to have the capacity to keep these projects on track, on time and on budget. There are still other problems with the Metro project too – the issue of the V/Line trains and freight trains on the further parts of the Cranbourne and Pakenham lines. The state government has got the faster carriages with the better controls and the better safety features and so forth, but it does not have those features on the other trains on that part of the network, so it naturally limits the outcome.

Then you have got the airport rail link. That is a project that the state government appears just to be unable to land. They should have taken the proposal by IFM. They should have put forward the proposal by IFM, the funds managers and the super funds that actually had a market-led proposal that would have put twin tunnels out of the city, out of Spencer Street, to Sunshine and then out to the airport from there. You would have been able to check in for your flight at Southern Cross. You would have been able to do the trip in 20 minutes, and yet now they are using the Metro and the capacity from the Metro. The proposal is to steal six services an hour from those in the west – six services an hour – when we know that already the capacity of the lines will be well exceeded. This government on delivery of services is failing; huge debt, failing; huge tax increase, failing the community; and families and businesses are feeling the pressure. They can feel the pips squeak under this government as the tax and the pressure is ramped up and ramped up and ramped up. But without the delivery on the other side, the failing education services, the failing health services, the failing transport services – all of those – are the outcomes, despite the massive increase in tax take.

Business interrupted pursuant to standing orders.