Wednesday, 4 February 2026

 David DAVIS (Southern Metropolitan) (14:22): I move:

That this house notes:

(1)   the financial position of Victoria has seen the state deliver deficit budgets and massively increasing debt in recent years, with debt scheduled to exceed $190 billion at the end of the forward estimates;

(2)   that due to financial stress a number of government agencies have required letters of comfort from the government to continue operating as a going concern, including:

(a) Museums Victoria;

(b) Greater Western Water;

(c) Alpine Resorts Victoria;

(d) Great Ocean Road Coast and Parks Authority;

(e) the Australian Centre for the Moving Image;

(f) the Geelong Performing Arts Centre Trust;

(g) VicTrack;

(h) V/Line;

(i) many health services;

(3)   that a number of government statutory authorities and agencies have referred to financial challenges they face or will face –

and I will detail a couple of those in my contribution –

and

(4)   that a number of Treasury advances were provided to agencies outside the normal budget process where the agency required additional funding to remain solvent.

The article by Sumeyya Ilanbey in the Australian Financial Review on 29 June picked up on this point of the bailout of a number of government agencies. Whatever you think about the level of government funding of particular agencies – and you can always have a debate about ‘more is needed here, less is needed there’ or a different amount or different shape of funding is needed – what should be common agreement across the chamber is that government agencies should be funded properly. They should have secure funding and they should have funding that is predictable, that enables their boards and the staff of the agency to plan into the future properly in a way that is not weakened by the uncertainty of funding or funding that is sometimes lumpy. But more than that, they need to have a sensible funding pattern and funding that does not undermine the work of the agency but enables proper planning to occur. These are important points.

The Treasurer, in response to my questions about letters of comfort yesterday, admitted that a large number of letters of comfort were used. She said that this had occurred for a longer period, and it is true that letters of comfort have been used for a longer period. There do appear to be rather more at the moment than is traditional. Further to that, the Treasurer also admitted that many of these letters of comfort were signed by her, but it seems clear that not all of them were signed by her.

We do not know from the Treasurer whether the ones that are not signed by her are vetted or agreed to by her or her Department of Treasury and Finance, but we do know that a number of agencies are also putting out further information that makes it clear that they are under very significant funding stress. It is true that the state’s financial position has deteriorated massively under the period of this government.

A member: No, it hasn’t.

David DAVIS: It sure has. You do not think that the state’s debt is a problem? Is that what you are saying? That is probably what you are saying. We know that Labor is not concerned about the financial position of the state. They actually run away with things. They do not properly constrain costs. We know the way Labor have behaved with many of the major projects.

Members interjecting.

The ACTING PRESIDENT (Jeff Bourman): Just a moment. Everyone is going to have their chance in time. We have only just begun. Mr Davis to continue without assistance.

David DAVIS: I am being provoked. I am finding it very hard to resist engagement with the provocation. I just want to point to one important point: more than $50 billion has been spent by this government on cost overruns on major projects. That is not the cost of the scoped project at the start, that is how much additional funding they are paying at the end. That is a huge amount of money under this government – more than $50,000 million in cost overruns. It is no wonder the state is under significant stress. It is no wonder the state budget is creaking, because they cannot manage projects, they cannot manage money, and because of their inability to manage these projects, the state budget is in some significant challenge. There is no question about that. A sign of that is the stress that is coming through into agencies with uncertainty in funding and funding that has not been secured for some agencies. It is interesting to point out here – and I am going to quote from the Sumeyya Ilanbey article here directly – that ACMI, the Australian Centre for the Moving Image, an important agency centred down in Fed Square, said:

… it was economically dependent on the financial support of the Victorian government “as the recovery and growth of self-generated revenue continues to be materially impacted by the cost growth impacting all its operations and the wider economy”.

The agency said it was able to prepare its 2024–25 financial statement on a going concern basis because it had received confirmation from the government it would be given additional funding.

ACMI received $30.5 million in government grants in the past financial year, but its self-generated revenue of $6.6 million fell below $7 million for the first time since the COVID-19 pandemic. It finished the year in the red to record an operating deficit of $4.9 million.

Great Ocean Road Coast and Parks Authority said it received a letter of comfort from the Treasury Department after June 30 for the period up to October 2026, as well as a treasurer’s advance of $6.1 million granted in August 2025.

A treasurer’s advance –

as Ms Ilanbey says –

is often used for urgently needed funds that are not listed in the budget, and the Victorian government has faced criticism …

We have had discussions in this chamber about what is appropriate use of a Treasurer’s advance and what is inappropriate use of a Treasurer’s advance, and sadly, it seems that the Treasurer is not changing her ways. The use of these –

Jaclyn Symes interjected.

David DAVIS: It is true. Here is the evidence on some of these authorities, where the government are backfilling agencies because either they have not properly funded them at the start or there is some financial challenge at the agency, and the government is using it to backfill that rather than properly setting out the funding year to year across the term. That is what is going on here. No-one has a problem with a Treasurer’s advance used for fire or flood or other emergency, or indeed sometimes, as the Treasurer is fond of pointing out, for capital projects that have got scheduled payments and the money is released by the Treasurer.

A member interjected.

David DAVIS: Let us get to all of these, but many of these are not in that category, I am sad to say.

A member interjected.

David DAVIS: No, I am making the point. I understand precisely what the Treasurer is saying, but I also understand that she is using it for a whole range of other purposes as well. The good use of Treasurer’s advances, the appropriate use of Treasurer’s advances, is sometimes overwhelmed by inappropriate use on other occasions, and that is what we are seeing under this government.

When we looked closely at the solvency support that was provided by government, the Geelong Arts Centre, under ‘Economic dependency’ at section 1.3 in its annual report, states:

The Trust is dependent on the continued financial support of the State Government and in particular, the DJSIR (Department of Jobs, Skills, Industry and Regions) … in consultation with … (DTF) has provided confirmation that it will continue to provide the Trust adequate cash flow support to meet its current and future obligations as and when they fall due on the basis of adherence to the agreed principles to operate in financially sustainable way –

they have sought, in effect, a letter of comfort –

On that basis, the financial statements have been prepared on a going concern basis.

It seems to me that that case might not be an actual letter of comfort, but effectively they have sought certain security guarantees because they have been very close to the wind. They have gone to government, and that has enabled them to go forward and prepare their statements with a measure of confidence because the government has given them certain secure guarantees. But those guarantees are only made public by one short paragraph in the papers.

Museums Victoria states under ‘Revenue from government and other grants’:

Following the lapsing of exhibition renewal capital funding in 2022–23, the combination of base funding and base uplift funding has proven insufficient to meet operational and program delivery requirements. As a result, an additional $13.723 million of government funding was granted over April, May and June 2025.

This is the sort of top-up that I am talking about, a top-up where the government has had to come in because it has not been properly funded at the start or the arrangements have not been clear at the start or because of some other deficiency in ministerial level governance. They go on to say:

As a State Government entity, Museums Victoria received this solvency support to facilitate essential activity and service levels –

in other words, they would have had to stop providing certain services; that is what they are talking about –

in line with the conditions attached to that funding and to ensure the organisation’s ability to trade as a going concern.

I am just using some of these as examples. People will understand that whatever level of funding you think is appropriate, it should be provided in a transparent way that enables the organisation to fund and to work through its challenges and to do that in a predictable way where good governance can come to the fore, not staccato funding, top-up funding of this type, other than in true times of crisis or flood – we understand all of that, but that is not what we are talking about with these.

The State Library of Victoria states under the heading ‘Going concern’:

As part of the preparation of the financial statements, the Library has undertaken an assessment of its ability to continue as a going concern for the next 12 months. In June 2025, Creative Victoria confirmed the Library’s base operational funding of $54.4 million for the financial year ending 30 June 2026, with forward estimates –

they had to guarantee the forward funding –

indicating continued funding for approximately $54 million annually through to 2028–2029. The Library will actively work with Creative Victoria and the Department of Jobs, Skills, Industry and Regions to develop a sustainable operating model –

that means they do not have a sustainable model. That is what that means –

that aligns with government expectations and maintains essential services.

This is the library that planned to close and cut the research librarians, the assistant librarians, at the library. That was their plan. They have pulled back from that now, but they were going to cut the librarians. A library without librarians seems very odd, research librarians in this case. They have sort of forgotten their mission, and we can see that there are clearly funding problems at the library:

Based on this future funding indication the Library’s going concern assumption has been deemed to remain valid.

I have just picked those as a number of examples. They are obviously arts-related portfolio ones, but there are others across government as well. You can see that organisations are under real pressure. The government have clamped the screws, they have tightened the screws and made it difficult for organisations to get through on the money that is involved.

Some organisations are going to government and saying, ‘We’re on the edge of being a going concern here,’ and the government has given them some security, some indication of future funding, which has enabled them to say, ‘Yes, we’re a going concern.’ It is not a formal letter of comfort, but it is a comforting engagement of that type. Then we have, of course, all those formal letters of comfort that we have talked about, and the Treasurer was at pains yesterday to try not to give away too much information, but it is clear she signed some of them. Some of them are not signed by her, and we do not know the numbers there. She did not seem to be able to answer about the number of letters that she had signed. I find that extraordinary. I would have thought across government –

Ryan Batchelor interjected.

David DAVIS: No, I did not, actually; I asked her about the financial year that finished in June just gone, and she could not answer that. She was Treasurer for seven months of that period – seven of the 12 months. If she cannot answer questions about seven of the 12 months –

Members interjecting.

David DAVIS: The going concern letters and the letters of comfort had been provided near the end of the year, when Jaclyn Symes was the Treasurer, and she did not know whether she had signed these letters or how many she had signed. I mean, I find that extraordinary. Across government she is responsible for these things. She is responsible for these letters of comfort, and she does not know how many she has signed and she does not know how many have been provided separate from her signing. I say that is a real concern. It was in a financial year when she was Treasurer, and it was when the reports were being finished towards 30 June, when she was Treasurer. Unlike what was just said over there before, she was Treasurer leading up to 30 June, when the reports were being produced. And what does she say? ‘Oh, I don’t know how many I’ve signed.’ Really? Seriously, a Treasurer who is signing letters of comfort for organisations that are teetering on the edge of being going concerns, and in fact, organisations that have teetered so far that if they do not have a letter of comfort, they would not be going concerns. The board would have to report that they are not going concerns. The board would have to come to the Treasurer and say, ‘We’ve got to close. We’ve got to freeze. We’ve got to stop.’ If there is no going concern letter, if there is no letter that provides comfort for those board members, they have to act. In good propriety they have to act.

But this Treasurer does not want to face up to the facts and does not want to tell us. We still have not heard how many letters she signed in the financial year just ended. How many letters did this Treasurer sign? Were there dozens? Were there scores? Were there hundreds? We do not know the number, and she appears not to know the number either. And that is before you get to the other letters provided by someone else – presumably the secretary of a department – on which she has not been clear about whether she knows whether they are all going or not, and how many of those. I want to hear how many of those letters there are too.

Then there is another tranche, which is a couple of these organisations I have just used as an example now, where they are teetering on the edge; they do not quite need a formal letter of comfort, but they need some formal statement out of government that says, ‘It’s okay, you are going to be funded, you’re not going to fall over, so you can report that you’re a going concern.’ So that is three layers, and we have not heard the full figures out of this, but the Treasurer is going to have to come clean with the full figures. How many letters of comfort did she sign? How many letters of comfort were signed by secretaries or others in different departments to underpin organisations related to that department as going concerns? All of this is a sign of serious financial stress.

Members interjecting.

David DAVIS: I want to say here that letters of comfort are appropriate on certain occasions, but what we want to hear from the Treasurer is how many she has signed this year, how many have been signed by others and how many of these other agencies are teetering on the edge where the financial position of the entity is problematic. We should also hear how many top-ups have been popped into these agencies in the last two months because they are teetering and they need an injection of funds to make sure they remain going concerns. That is what is going on here. We all know what is going on, and we know that it is wrong.

In conclusion, the state has got a real financial problem. The Treasurer has not managed this well. The Treasurer has not been transparent about this. We want to know the number of letters of comfort she signed. We want to know the number of other letters that were signed by secretaries and others in departments to prop up organisations that would otherwise not be going concerns. We want to also know what has gone on more broadly with these last-minute top-ups that have been put in place, and we want to know, finally, what the situation of those organisations is. Why were they in a position in May and June where their budgets had almost run out and they needed those top-ups? We heard about service levels being impacted unless the top-ups were made. That would make it very transparent – if the library or the museum had to close their doors for a few weeks because they had run out of money. That is what we are talking about. We are talking about running out of money and not having enough money to keep going. They are talking about whether they are a going concern.

Ryan Batchelor interjected.

David DAVIS: You have heard the words. (Time expired)

 Ryan BATCHELOR (Southern Metropolitan) (14:42): The Liberal Party knows a thing or two about teetering. They are teetering on the edge. They have been through, what is it, six leaders in seven years. Talking about top-ups, I mean, they are at the front of the queue for top-ups.

David Davis: On a point of order, Acting President, this is about letters of comfort. It is not about the Liberal Party. He has not even made an attempt to talk about the motion in question.

Michael Galea: On the point of order, Acting President, Mr Batchelor had not been talking for 15 seconds when Mr Davis put up his point of order. He was responding to you, Mr Davis.

The ACTING PRESIDENT (Jeff Bourman): Mr Batchelor, if we can keep it at least confined to the motion before us, that would be awesome.

Ryan BATCHELOR: Absolutely. All I was doing was responding to the contribution made by Mr Davis and his invocation of ‘teetering’ as a concept relevant to this motion.

I will go to one other element of his motion today, and that is his inability to read the state’s budget papers and his inability to understand the state’s fiscal position. For the benefit of others who might be listening, I will take the house through what the state’s fiscal position actually is, because if you listen to Mr Davis, you may be misled. It is very, very clear. The annual financial report for the state of Victoria for the year 2024–25 tabled in this place in I think October last year showed that we had an operating cash surplus of $3.2 billion. It is the third year in a row that we have had an operating cash surplus in the general government sector. The operating cash surplus in the annual financial statement was in fact $2.6 billion higher than it was in the revised estimates for the 2025–26 budget. The operating result for the general government sector in 2024–25 was $816 million better than the revised estimates in the 2025–26 forecast and $1.6 billion better than the result in 2023–24. From one financial year to the other an operating result for the general government sector that was $1.6 billion better, and this year we are forecasting a net result from transactions that is in surplus.

The latest update, which was published in the budget update at the end of last year, shows the revised estimate of that surplus from transactions as being higher than forecast in the budget. We will have to wait and see what happens in the figures that are released in the budget papers in May, but I think there is a pretty clear trajectory.

There is another thing that Mr Davis neglected to mention in his contribution. He did mention what the net debt figures are projected to be, but what he did not say was that the projections on debt are lower than they were in updates prior and that net debt was lower than forecast in the last budget.

They are just some facts that might like to be put on the table if we are wanting to get into a conversation about the state’s fiscal position. People can actually go and read for themselves, in black and white, the numbers that are reported in the annual financial report for the state of Victoria for 2024–25, which gives you a full-year picture for the last financial year. The two estimates for the budget for 2025–26 show quite clearly that we are on track to deliver that surplus result, as the third step in this government’s fiscal strategy for the state of Victoria that we are delivering – each and every one.

This government is not going to take any lessons from the financial incompetence of the Liberal Party or from a person, particularly in the context of this debate, who when he was the Shadow Treasurer could not add up. We are not going to take a word of advice from him and from them about the fiscal position of the state of Victoria and what is necessary to make sure that this government continues to deliver. Because what we do know is that the Liberal Party now have dug themselves into an even bigger problem, an even bigger hole, when it comes to the finances of the state of Victoria, because they have spent the last three years wandering around the state telling anyone who cares to listen that they are going to keep scrapping taxes – I think it is five, maybe six different taxes that they keep going out, day in, day out, and telling people that they are going to get rid of. The problem is that when they go and tell people they are going to get rid of the tax they do not like, what they do not then say is how they are going to fund the services that rely upon it. Because when you go out and say you are going to scrap the tax, what it means is you are going to cut the funding. They have got an $11.1 billion hole in their projected finances should they ever form government. The only way the Liberal Party is going to make up that revenue hole that they have created is by cutting services, because that is what the Liberal Party does. The Liberal Party cuts frontline services in the state of Victoria. They did it before and they will do it again.

David Davis interjected.

The ACTING PRESIDENT (Jeff Bourman): Order! Mr Davis, if you are going to interject, from your spot, please. And just for the record, interjections are unruly anyway.

Ryan BATCHELOR: They did it before, they cut before, and they will cut again, because that is central to the Liberal Party’s DNA. They have dug themselves into a massive hole by parading around the countryside, telling anyone who will listen that they are going to scrap a tax they do not like, but they do not complete the sentence. They are not honest enough with the Victorian people to complete the sentence and say that they are going to cut funds to pay for it. That is the only way that they are going to be able to deliver what they promised. What they promised the Victorian people is to cut the funding. If they want to be serious about coming here and having a debate about the letters of comfort that the Treasurer is providing to various agencies to deal with the routine course of running agencies that often have revenue variations that do not always necessarily accord on a cash flow basis with their expenditure, they should know that a routine and common part of making sure that those agencies do not have unnecessary cash reserves to hand is that they are very clearly able to be confident, through these letters, that they can meet their obligations as and when they fall due.

If the opposition is serious about wanting letters of comfort, the Liberal Party needs to write a letter of comfort to the Victorian people telling them how they are going to fill the $11 billion black hole that they are creating in the state’s finances by their promises to scrap a range of levies. If they cannot provide that level of comfort to the Victorian people about the cuts to frontline services that they will make if they ever get elected to the government benches in this place, then they are being dishonest with the Victorian people.

If we want to get into a debate about letters of comfort, if we want to get into a debate about the state’s fiscal position, the Liberal Party should first start by telling the truth about the state’s fiscal position: that we have got a cash surplus and we are projecting and will deliver an operating surplus here in the state of Victoria. They have got to come clean with the people of Victoria and tell us – tell them – what frontline services are on the chopping block to pay for the $11 billion of lost revenue that sits on their projected fiscal position as a result of the taxes that they have said that they will scrap. If they cannot tell the Victorian people, if they cannot give comfort to the Victorian people about how they are going to pay for their promises, we should not listen to a word they say.

 Aiv PUGLIELLI (North-Eastern Metropolitan) (14:52): I rise to make a brief contribution on behalf of my Greens colleagues with regard to motion 1234 that the opposition have brought to the chamber today. I have been listening to the debate and do not seek to in any way engage in any kind of mudslinging with regard to management of the state’s economy. However, in review of the motion as it is before us, largely I would say it is a reflection of matters of fact with respect to the state’s budget. I do not think it is the entire reflection necessarily of the state of Victoria’s economy. However, it does list a number of concerning matters that would be of interest to the Victorian people, notably, from the outset, deficit budgets and increasing debt over recent years:

… debt scheduled to exceed $190 billion at the end of the forward estimates …

It highlights the financial stress and impacts facing a number of government agencies and statutory authorities and the challenges that they are facing in the current state of Victoria’s economy, detailing the required letters of comfort to several agencies operating as a going concern. There is a list that has been provided that Mr Davis has detailed: Museums Victoria, Greater Western Water, Alpine Resorts Victoria, Great Ocean Road Coast and Parks Authority, Australian Centre for the Moving Image, Geelong Performing Arts Centre Trust, VicTrack, V/Line and many health services.

When I look at an institution like the Australian Centre for the Moving Image, having recently attended their exhibition of Game Worlds, for example, this is a really important institution in Victoria that sits right at the centre of our cultural map for many parts of these industries. Looking at the incubation of talent that that centre undertakes for early- to mid-career professionals who are looking to break into what is a growing and booming industry, where Victoria really can be and should be a leader on the global stage, where we have seen successes come out of Victoria and our artists and practitioners from this state, we want to know that an institution like that has the funding that it needs in the long term, that sense of security, to deliver those outcomes from now and into the beyond. So Mr Davis I think has spoken to that somewhat in his opening contribution, this idea of security and continuity of funding to important institutions like that for what they provide to people who work within those industries but also more broadly to the Victorian people.

The motion does highlight the challenges facing a number of agencies and authorities, particularly referring to Treasurer’s advances being provided to agencies outside normal budget processes where the agency has required that additional funding. This is a tool that is available to government to respond to matters that are facing a particular body or agency at a point in time. However, we have seen – and this has been documented through budget estimates and outcomes processes – the increasing prevalence of Treasurer’s advances and the challenges that poses both to us in this place trying to scrutinise government operations and spending but also for transparency and the Victorian people. There are a range of matters that come up when we see that increasing prevalence of Treasurer’s advances. People want to know that there is that stability in the management of funds going to important services, programs and agencies that serve everyone here in the state. And if there is not the transparency that you would receive from regularly acquitted funds through the budget processes, then that can be a cause for concern – that we are not seeing that transparency in how and why funds are being given out, and for what purpose, to various agencies at a point in time.

When we look at budgets for Victoria – and we hear this at budget time in May – budgets are a matter of priorities. So when we look at the reflection of the state’s economy that the opposition have brought to the chamber today, we put it in the context of other decisions that the state has made in recent or past budgets, like funding of corporate boxes and the expansion of provision to the grand prix. We look at the continued propping up of the greyhound racing industry in Victoria. We look at allowing the continued expansion of fossil fuels and exploration for fossil fuels in Victorian lands and waters. Decisions like that have ensuing impacts in the long term, both, in the case of fossil fuels, environmentally and economically. These decisions have impacts, and these are priorities that are being expressed by the government. We see at a snapshot some resulting impacts from what has been presented here in the motion before us.

We see recent plans with regard to attempts to axe VicHealth. It effectively creates a false economy, axing an important, world-leading health promotion agency to try to save money in the short term when the long-term impact of removing an agency like that has been well documented in recent weeks – the challenges that poses to preventative health for Victorians. That decision shows the wrong priorities. So when we look at what is before us, the state of affairs for Victoria right now, in the matters that the opposition have brought to the chamber it highlights in a sense the challenges that are facing the state economically right now. And how we respond to these challenges as people in this place from varying parties, backgrounds and communities that we serve is going to be the test of our values, our character and our priorities. It is how we respond to the challenges that are listed here that is going to be key. The Greens will be supporting the motion as it is noting matters of fact. So I thank the opposition for bringing it.

 Evan MULHOLLAND (Northern Metropolitan) (14:58): I thank Mr Puglielli for his contribution, and I also rise to speak on Mr Davis’s excellent motion on letters of comfort. We saw this reported on in the Australian Financial Review: the state of Victoria has delivered significant budget deficits that are scheduled to exceed $190 billion at the end of the forward estimates. We note that the number of agencies that, due to their financial stress, have required letters of comfort includes Museums Victoria, Greater Western Water, Alpine Resorts Victoria, Great Ocean Road Coast and Parks Authority, Australian Centre for the Moving Image, Geelong Performing Arts Centre Trust, VicTrack, V/Line and many, many health services.

I could not help but hear Mr Batchelor speak. He was going on about us going around the state scrapping taxes. That is because we are the party of lower taxes. I am old enough to remember the former Premier, then opposition leader, on the eve of the election saying, ‘There will be no increases in taxes under a government I lead’ – there would be no increase in taxes.

Over 55 new taxes or increased taxes later, where did that promise go? They broke it almost immediately, so they lied their way into office. We know they rorted their way into office through the red shirts, but they lied their way into office because they knew that tax increases were not popular with the Victorian people.

Mr Batchelor is repeating the old same cuts scare campaign, just like the Mediscare campaign of the past. We know that Jess Wilson has already announced a frontline services guarantee. They want to talk about cuts, this from the party who are cutting VicHealth. We have former Labor luminaries like Nicola Roxon and others saying that you people are mad for even considering this. Surely there are some people in the Labor Party thinking that this Treasurer cannot manage the books. Surely there are some people on that side of the chamber who think we should be putting some money into VicHealth instead of the Suburban Rail Loop Authority spending $200,000 on pot plants, instead of bungling ministers spending $13 million on machete bins. Maybe we should be putting that money into VicHealth, into some of our health services that the government has tried and tried and tried again to merge, and they want to talk to us about cuts.

Mr Batchelor was going on about an $11 billion black hole, which on her first test the Treasurer failed, because she had a massive black hole within her accusation of our black hole by suggesting that we were going to scrap all forms of emergency services taxes rather than reverting to the previous emergency services levy. Rather than scrapping it completely, we want to go back to the previous tax that existed. But the Treasurer is either incompetent or misleading Victorians, which is what she is doing. Mr Batchelor wants to talk to us about black holes. Maybe he did not see the announcement from Ms Shing about the Suburban Rail Loop and their value capture plan. The government now – which was never in the business case, by the way – wants to hypothecate all existing taxes around SRL stations: stamp duty, land tax, you name it. Money, and we are talking billions, that would usually go to consolidated revenue and fund frontline services like our hospitals and our schools across our state is now going to be going towards a rail line from Cheltenham to Box Hill that does not add up unless you build the northern section, which the government is not going to do.

I notice Mr Batchelor has gone a bit silent, because they cannot explain their own billions of dollars in black holes and how they impact on the budget. It is extraordinary that the government has announced a value capture plan to capture the value in the area to that is going to add to the budget bottom line. The government is already funding a third of this project and now it is going to be funding most of the value capture of this project as well for an eastern section that does not even provide a return. It is crazy, and this government wants to lecture us about cost.

This government is cutting health services. This government has attempted over and over again to merge health services. It is cutting VicHealth. There are 400 less police since this Premier came to office, and this government wants to talk to us about hypothetical cuts. Look in your own backyard. It is just astonishing that this government once again is going to rely on an imaginary cuts campaign when people see the slashing of services in their own backyards. I am going to name one thing the government should cut, and that is the lawn on Mickleham Road in Greenvale. You know the difference between a council road and a state government road from the length of the grass.

As soon as you get off at the airport onto the Tulla and then onto the ring-road, you are greeted by graffiti, you are greeted by weeds and you are greeted by overgrown grass – it is completely different to the experience when you get off in Sydney – because this government cannot manage money. How are we meant to attract tourism and investment and good impressions of our city when your first impression is graffiti and weeds and overgrown grass and potholes? There is no pride in our state under this government. This state is in a malaise under this government due to lack of funding of our essential services, of our roads and of our government agencies.

Ryan Batchelor interjected.

Evan MULHOLLAND: I am not talking the state down. I am proud to be a Victorian. I am bloody proud to be a Victorian. I want to restore pride in our state, unlike this government, who have left our state in despair, who have left our roads in despair, who have cut our CFA, who are cutting VicHealth, who are trying to merge health services – and they have the gall to lecture us about cuts. Really? I mean, they are hypothecating taxes, existing taxes like stamp duty and land tax, to pay for a rail line from Cheltenham to Box Hill that does not even have a cost–benefit ratio that adds up. You want to talk to us about cuts – really? There is a reason why we have a frontline services guarantee under our opposition leader Jess Wilson, which has completely muted their argument. We want to do things like pay nurses properly, we want to do things like pay our teachers properly and we want to do things like keep VicHealth. They do not – you know they do not – because they would rather spend billions of dollars on a train line from Cheltenham to Box Hill. That is not going to build a new hospital in the northern suburbs. That is not going to fix Donnybrook Road. That is not going to help anyone.

You have communities that are starved of infrastructure. The government twice – twice! – have promised to electrify the rail line in Melton and Wyndham Vale, at two different elections. There is still no further progress – all election promises, all spin. But they can get the SRL going very quickly. They can get it quickly on an election timetable and rush through multibillion-dollar contracts consigning our state to hundreds of billions of dollars worth of debt – over $190 billion of debt. We are going to be paying over $25 million a day – over $1 million every single hour – and that is going to keep going up with interest rates as well. I tell you households are very unhappy about an interest rate increase. But the second most unhappy person in Victoria will be the Treasurer when she realises her balance sheets are going to go through the roof because we do not have any leg room for economic shocks. Our agencies are on their knees and our health services are on their knees. We had that case of a health service in the member for Euroa’s electorate that was asked to dip into workers’ annual leave entitlements in order to pay down their debt. That is the crisis of economic management that is happening under this government, and I will not take any lectures from those opposite on the state of our finances.

 Michael GALEA (South-Eastern Metropolitan) (15:08): I am delighted to rise to speak on this motion that has been put before us today by the defeat-seeking missile that is the Victorian Liberal Party and Mr Davis. Again, it is a shambolically put together motion with less than 24 hours notice. I am not sure what you were originally going to do, but you have put this together – you have found something and slapped it together at the last minute, as is your style, and here we are. Again, Mr Davis, you ignored some really critical points in your comments earlier. You talked about the AFR, the Australian Financial Review, but I invite you to actually read the other AFR – that is, the annual financial report. We have had this discussion before, Mr Davis. I do not know if you have, because if you had read it, you would have seen on page 2, under ‘Fiscal objectives’, that for the past financial year Victoria’s net debt to GSP was at 23.7 per cent, lower than the May projections of 24.5 per cent. You would also know, Mr Davis – or perhaps you forgot to mention – that the net operating cash surplus is $2.6 billion higher than it was forecast to be in the May budget. But I do want to get to the heart of this and into this matter of letters of comfort.

Mr Davis well knows that these are relatively routine mechanisms that governments and treasurers use.

Ryan Batchelor interjected.

Michael GALEA: Well, right you are to point me in that direction, Mr Batchelor, because in fact I understand, Mr Davis, when you were last in government, when you were the Minister for Health, under your watch, the Treasurer – I am assuming it would have been Kim Wells, probably –

Ryan Batchelor interjected.

Michael GALEA: Oh, there were two. Let us not go into the revolving door of who the Treasurer was or who the deputy leader was or is this week and what you guys are up to in Nepean. Who is your deputy leader? Mr Southwick again? I understand that two members of your party room could not even vote properly in that ballot. Two informal votes is an extraordinary lack of faith in your own party.

Evan Mulholland: On a point of order, Acting President, the member is drifting very far away from the substance of the motion.

The ACTING PRESIDENT (Gaelle Broad): I will bring the member back to the content of the motion.

Michael GALEA: Thank you, Acting President. I did get distracted there, but I will return to the point when Mr Davis was the Minister for Health in the shambolic Baillieu–Napthine governments of just over 10 years ago. In 2012, 29 letters of comfort from the health department were issued to public hospitals under his watch. In 2013 it was 28 letters of comfort and –

Ryan Batchelor interjected.

Michael GALEA: Just in one year, Mr Batchelor, and in 2014 it was 32 letters. You were on the upward tangent there, Mr Davis, towards the end. I realise it is hard to imagine Mr Davis’s activities being able to provide comfort to anybody, but he did provide a large number of letters of comfort, or his department was given a large number of letters of comfort by the Treasurer in that government. I illustrate this to make the point that there is nothing unseemly or untoward about a government undertaking this process.

On that note I return to another part of Mr Davis’s motion and that is Treasurer’s advances. Again, a number of these have been undertaken by governments – Liberal and Labor – in this state. I also know in coming to speak on Treasurer’s advances that the Treasurer has been very clear in her objective to increase transparency around that and to reduce the instances of those Treasurer’s advances, but there are very legitimate ways in which they are used. As we would know, and as I have heard ad nauseam in debates in this place and in the Public Accounts and Estimates Committee and in other forums as well, they are routinely used for mechanisms such as stage payments and unforeseen contingencies, which is part of their purpose. I do note that they continue to be reported. Indeed the reporting of Treasurer’s advances is one of the most transparent parts of the budget that Mr Davis, if he cares, could go and have a look at for himself. On that too, it is also worth noting that since the peak of the pandemic when we did see a number of Treasurer’s advances used for the emergency circumstances that we were in, they have reduced now by over 50 per cent from that point. Even just in the last year they reduced not quite by such a dramatic figure, but I believe about 9.7 per cent so far this year.

There is clear evidence to show that this government is living up to its commitment, that we are continuing not just with our broader fiscal strategy but, when it comes to Treasurer’s advances, providing that transparency and accountability. As you would be able to see from the budget papers, that amelioration of Treasurer’s advances as a tool for –

David Davis: On a point of order, Acting President, the member has referred to a percentage change in the numbers of letters of comfort, which implies that he has available to him the actual numbers, otherwise he would not be able to calculate a percentage. I ask if he might make available to the chamber those figures.

Ryan Batchelor: On the point of order, Acting President, firstly, that is not a point of order, and secondly, Mr Galea was referring to Treasurer’s advances, not letters of comfort.

The ACTING PRESIDENT (Gaelle Broad): Thank you, Mr Davis. It is not a point of order, but I will leave it to Mr Galea to respond.

Michael GALEA: Look, I am disappointed that Mr Davis clearly has not been listening to my contribution. Clearly his listening skills are about as good as his reading skills when it comes to the annual financial report. If he had been listening, he would know that I was referring to Treasurer’s advances, which he may not recall, but it is actually a part of this motion. You might not recall when you were hastily putting this all together last night, Mr Davis, but you did actually put that into the motion, and I was trying to be as relevant to your points as I could, which is why I did discuss letters of comfort, yes, and then I discussed Treasurer’s advances. If you cannot interpret what I am saying, Mr Davis, I would be more than happy to continue this conversation with you beyond my speech. I would be more than happy to invite you to look at Hansard. But I did refer to the recent reduction of TAs of that 9.7 per cent figure. That is the figure that you may have mistaken for something else, but I encourage you to keenly listen, because we do have very interesting things to say on this side of the chamber, Mr Davis, because unlike members opposite, we actually talk up this state and we talk up the investment.

We are proud to acknowledge, for example, the incredible net growth that we have seen in small businesses in this state over the past 12 months. I am proud of the fact that our business investment has gone up by 39 per cent since the peak of the pandemic, which compares to 30 per cent for the rest of the nation. I am proud of the fact that we have major international cultural and sporting events that draw people in, such as the Australian Open – again, yet another record crowd that we saw last week. The Liberal Party members may not be ready to serve. The Liberal Party deputy leader himself might be complaining about the atrocious behaviour that he experienced at the hands of his Liberal Party colleagues, because we know that they are more interested in themselves and attacking and bringing down each other than they are in governing in the interests of Victorians.

David Davis: On a point of order, Acting President, he is flouting your earlier ruling and deviating well away from the motion again.

The ACTING PRESIDENT (Gaelle Broad): I will uphold that point of order. It was talked about earlier. If you could bring it back to the content of the motion, please.

Michael GALEA: I wondered if perhaps because Mr Davis was not listening to my remarks directly on his motion, he might be more excited by comments on the Liberal Party, and indeed he was, because we know that that is what they care about.

But this is a government that has a proud record of investing in this state, and we will continue to provide the support that we need for all agencies to operate in a fiscally sustainable manner. I reiterate the point that neither of these things which are being squawked about by Mr Davis today is in any way unique to this or any other government in the country. Letters of comfort and Treasurer’s advances are undertaken as part of routine government spending, and Mr Davis should know that. If not, I do question how he was presiding over the health portfolio for four years and somehow unaware that so many letters of comfort were provided to his department in that time. Maybe he was too busy cutting the whooping cough vaccination program, which happened at that time, or attacking the paramedics in our state, because we know that is what he would do if he were given the keys of government again. That is the first thing you would do. You would cut $11.1 billion out of services.

 David LIMBRICK (South-Eastern Metropolitan) (15:18): I would also like to speak on this motion concerning debt and letters of comfort. I would like to say from the start that the Libertarian Party is very concerned about the financial position over the long term of this state and where it might go and the hundreds of billions of dollars in debt. This is a big problem, but I take issue with and strongly disagree with one of the comments made by Mr Batchelor. He claimed, quite rightly, that if there are major tax cuts by the Liberal Party, there will have to be cuts. The problem with what Mr Batchelor said is the assumption that the Liberal Party will actually make any cuts, and they have stated quite openly that they will not. One of the things –

David Davis interjected.

David LIMBRICK: They will stop waste; they will be better managers. Right. Well, one of the very modest things – a bit too modest, in my view – which has been brought up in this debate that the Labor Party has done recently, which I have publicly said is very sensible, is defunding and abolishing VicHealth, which has about a $50 million budget. It is a significant amount of money, but in the scheme of billions it is not that much.

But the Liberal Party apparently are refusing to support that. Weirdly – I do not know why – they have come out and said, ‘No, we’re going to keep VicHealth.’ They want to keep VicHealth. If you want to talk about waste, let us look at some of the stuff that VicHealth actually does and why the Liberal Party want to keep VicHealth, because they should not want to keep VicHealth, and I guarantee that I will support cutting VicHealth and abolishing VicHealth. One of the things that VicHealth does is make a lot of videos. They put them on YouTube, and they are very, very high-quality videos. They look quite expensive actually – very high production values, obviously a lot of work and thought has gone into it, lots of people. One of the videos that they did was around running tips and drills, because of course there are no fitness videos on YouTube at all and VicHealth needs to do that and to enter into that market. I can tell you that the running tips and drills video got 24 views, and at least four of those views were my office and my staff. I do not know whether anyone in the Liberal Party gets running tips from VicHealth, but I certainly do not. I am pretty sure that if I do a search on YouTube, I can find some videos on exercise. I am pretty sure I do not need VicHealth to do that.

VicHealth do all these things with councils, and one of the things that they did is celebrate the Nillumbik Shire Council Rainbow Ready audit, where they worked with the council to get the Rainbow Ready audit and raise the Progress Pride flag. I am sure Mrs McArthur wants to keep that and raise the Progress Pride flag at Nillumbik Shire Council. They went to all this trouble to make this video. It got nine views. Four of those were from my office. City of Kingston – that is in my area – alcohol-free youth events. That is a great thing, right? Let us make a great big video on alcohol-free youth events in Kingston – 20 views. Has anyone in the Liberal Party seen these videos? I do not think they even get their own staff watching these videos.

One of the other things that VicHealth has been lauded for – I have no idea why; the major parties seem to exist on a different planet to me – is our tobacco policy, which back on planet Earth is an absolute disaster. In fact the rest of the world looks at us and sees us as a case study on what not to do. They look at us and they look on in horror at what has happened in Victoria and the rest of the country. They look at the hundreds of firebombings. They look at the murders that have happened – assassinations. They look at the explosion in organised crime. What we have done with vaping has been an absolute disaster, and they look at our tobacco policy and they see an absolute disaster. In fact it is so bad it has put our national security at risk. Those same organised crime networks that distribute tobacco were outed by the AFP and ASIO as having been linked to the Islamic regime in Iran and have conducted firebombing attacks. That is how bad our tobacco policy is. Yet Dr Demaio, the former CEO of VicHealth, May 2023:

As Australia announces world-leading protections on vaping and a bold new National Tobacco Strategy, these comprehensive measures once again place Australia as a global leader in tobacco control!

Absolutely fanciful. This is insane. No-one looks at Australia and thinks we have good tobacco policy – no-one in the world. Everyone looks at us and thinks, ‘My goodness.’ 2 May 2023:

Well done to @Mark_Butler_MP and the Australian Government for their groundbreaking reforms announced today – protecting generations from the harms created by Big Tobacco and the vaping industry.

I could walk 100 metres from this Parliament and I could probably find a dozen shops that will sell me vapes over the counter, imported from China, totally unregulated and controlled by organised crime. 28 June 2024:

This new vaping legislation is a BIG step forward for Australia –

a big step forward for organised crime –

in protecting young people from addiction and a host of health risks. The industry is busy making noise and spreading confusion. This is what they do. The facts remain that this is an important policy for health.

I was listening this morning when there was talk about inflation. I actually dispute the CPI figures put out by the ABS and the federal government. Do you know why I dispute those figures? Because they include tobacco and they assume tobacco is being sold at retail prices. Organised crime controls most of the market. The inflation figures are inflated because you can buy packets of tobacco cheaper than ever right now.

Organised crime is literally lowering inflation in this state because of our tobacco policy. It is so mad. You can laugh, but why does the Liberal Party not want to hold these people to account? Shut them down. Hold them to account. There is so much in government that we could shut down. No-one should look at this stuff and say this is essential for Victoria.

Here is another thing that they have done – this is not related to tobacco policy; it goes on and on. Back in May 2023 this was funded primarily by VicHealth at a university: a new position with a total remuneration package of about $125,000. It could be done remotely, apparently. What they did was employ someone to go around the university and wave their finger and give lectures to students –remotely, apparently, so maybe they were waving their finger by Zoom – about vaping, telling the uni students not to vape. They want to spend $125,000 a year. This is just at one university, Melbourne University. They have got a whole bunch of other ones they want to do. Maybe the Liberal Party wants to expand their budget so they can do this at every university in the state. This is not good spending of taxpayers money. It is an absolute waste.

They are not even focusing on tobacco; they are focusing on vaping. They want to take credit for policies that they think are attacking the most harmful consumer product ever produced, which is tobacco, and instead of attacking tobacco, they are attacking vaping, which is the pathway away from tobacco for many people. They have not stopped vaping at all. In fact vapes are more widely available than they have ever been, but the problem is they are all imported from Shenzhen in China. They are unregulated; you do not know how much nicotine is in them. In the old system, when we had this grey market where we could import some of this stuff from more sensible jurisdictions like New Zealand, at least we had some sort of regulations, or at least we relied on New Zealand’s regulations, which we do not do anymore – we rely on the goodwill of whoever is making these things in China.

With the tobacco, the tobacco is not made in China. Some of it is – it depends which criminal syndicate you are buying from. But it seems that most of the tobacco that is being sold now due to policies that were pushed by VicHealth, which the Liberal Party seem to refuse to want to shut down, comes from the Middle East. It is smuggled in via the UAE. The most common brand that you see is Manchester. You see packets of them right out in front of Parliament. You see them everywhere. Where is this money going? Where is this money being laundered? The owner of that company is located in Syria. We already know that there are connections to terror networks. What on earth have we created here, and why aren’t we holding these people to account?

You could go through the entire public service like this. There needs to be not just tinkering around the edges, because what we see in VicHealth is not unusual, it is common. When the Liberal Party talk about stopping waste, this is exactly the sort of waste that we should be getting rid of, and yet the government cannot seem to even get this tiny, modest thing through. They cannot get any support for it. It is even controversial. Mr Puglielli got up and said how wonderful VicHealth is. I do not know – maybe he wants to see the video of the alcohol-free youth events, and maybe the views will go up to 21 now. This is not a good spend of taxpayers money, and if– (Time expired)

 Bev McARTHUR (Western Victoria) (15:28): Yesterday in this house the Treasurer started responding to Mr Davis’s important motion pre-emptively, and her instinctive response was revealing. She turned the issue around and tried to claim that the proliferation of letters of comfort across government agencies is actually a good thing, somehow a clever way of managing the state’s finances. I would not deny that they have their place, but to try to pretend this general proliferation is an endorsement of Labor’s financial management is not credible. They are not a sign of strength. They are the financial equivalent of life support, keeping entities alive while their operating models have effectively collapsed.

We are not talking about bodies which simply exist to redistribute taxpayer funds from departments, we are talking in the main about bodies which are designed to act commercially. For decades Parliament has created these bodies for a clear purpose: to separate service delivery from the central bureaucracy, to impose commercial and financial discipline and to protect the state’s balance sheet from operational risk. This is particularly explicit, to refer to the motion, in the case of water authorities, rail asset managers and resort managers. They were not intended to be just departments with a different name; they were supposed to be financially accountable and responsible bodies with their own books, their own boards and their own discipline. That system is now breaking down. We are witnessing the rise of what could be called statutory zombies – agencies which technically exist in law but in reality only survive because the Treasurer signs, as she seemed proud to proclaim yesterday, a piece of paper saying ‘Don’t worry. The state will pay if they can’t.’ This is explicit in the case of the water industry. Section 94 of the Water Act 1989 states that every water corporation:

… must act as efficiently as possible consistent with commercial practice.

That is not guidance or a slogan, it is an obligation. It is the very reason water authorities were removed from the previous rural water commission and corporatised in the first place, so users would pay for services, not taxpayers, and so poor management would not be hidden inside treasury.

Now we have Greater Western Water, the corporation responsible for Melbourne’s western and regional supply, who required a letter of comfort from the Treasurer in November 2025 to continue as a going concern. Why? Because its billing system failed so badly that customers received late bills, multiple quarter bills or no bills at all. Their cash flow collapsed, management could not demonstrate that the organisation could meet its debts and ultimately the Auditor-General could not even complete the audit on time because of what he described as ‘contentious issues’. It is an extraordinary thing when a commercial utility cannot bill its customers, cannot complete its audit and cannot demonstrate solvency without a government guarantee. It is certainly not, as the law requires, operating ‘consistent with commercial practice’, yet the Treasurer yesterday characterised letters of comfort as a mechanism to avoid having to put taxpayers money into agencies. That should not be in question. Of course we should not be paying Greater Western Water for their failures. This letter of comfort is a blank cheque from Victorian taxpayers, signed by a Treasurer who knows that other people have to foot the bill.

Alpine Resorts Victoria is another of the agencies Mr Davis identified in the motion. Alpine Resorts Victoria was created in 2022 by this Parliament to ‘build economic resilience’. Its own corporate plan says:

Our priority is to move towards each resort achieving an annual break even or cash positive position, with each resort being able to independently fund the renewal of their asset base, and surplus funds committed to an ARV Capital Investment Fund …

This is the statutory vision: self-funding resorts investing in their own future. The reality: Alpine Resorts Victoria requires more than $13 million a year in emergency support just to keep Lake Mountain and Mount Baw Baw operating. It requires letters of comfort to be considered solvent, and three years after its creation it is still writing a pathway to sustainability report for the minister. That is not economic resilience, it is permanent dependence. The contrast with the private sector in this case is particularly devastating. Private operators at Mount Buller, Hotham and Falls Creek are sufficiently successful to invest their own money, $17 million at Hotham alone, taking real commercial risk and operating without state – that is, taxpayer – guarantees.

The alpine industry generates $2.14 billion in economic output every year. It is a thriving private sector, yet the state-run operation cannot even break even. V/Line is another, albeit different, example, recording a $443 million deficit while relying on a letter of comfort from the Department of Transport and Planning to stand behind them. VicTrack, the custodian of the state’s rail assets, required by law to manage them for commercial gain, received a modified audit opinion from the Auditor-General, forcing Treasury to make central adjustments to stop that failure contaminating the state’s consolidated accounts.

Again, letters and adjustments are being used to paper over the cracks of total incompetence. The Treasurer yesterday suggested that letters of comfort are good for government finances because they avoid cash outlays. Yet, as I have described for many of these supposedly commercial agencies, the letter of comfort simply replaces missing revenue with the state’s taxing power. The idea that this is fiscal discipline is laughable; it is more like fiscal camouflage. It is just a variation on the government’s other method of filling budget black holes: Treasurer’s advances. In 2024–25 the Treasurer quietly issued $1.5 billion in off-budget advances to health services to keep them operating – money that was not in budget paper 3 and not debated in this Parliament and which totally bypassed the proper appropriation process. The Public Accounts and Estimates Committee has now had to ask where that money went, including how much simply went to keeping insolvent hospitals alive.

This is the same pattern. When agencies fail to live within their statutory funding models, the government does not confront the failure. It bypasses Parliament, issuing letters of comfort and plugging holes with Treasurer’s advances. That is why we now face a debt level which is fast rising towards $200 billion. That is why we face a debt interest bill of more than $20 million every day – Victorian taxpayers money going direct to our creditors without providing a single doctor, nurse, teacher or repaired road. For the Treasurer to stand up and pretend that all is well and that the Victorian government is a model of efficient, effective financial operation is incredible. It is hard to know whether she is trying to cover up the problems for political reasons or whether she truly believes it. Either way it is a disaster for Victoria, and the only solution seems to be to replace the Treasurer or replace the government. I urge everyone to support Mr Davis’s motion.

 Jacinta ERMACORA (Western Victoria) (15:38): I was surprised to hear last night this motion read in at the last minute. I thought there was going to be another topic.

David Davis interjected.

Jacinta ERMACORA: At the last minute, and the agenda for today changed. I can just imagine what it must be like in the party room with these sorts of changes at the last minute all the time. What I do not see is an overarching, clear and concise, unified strategy from the other side. This swapping of motions at the last minute is very lazy and disorganised.

Members interjecting.

The ACTING PRESIDENT (Gaelle Broad): Order! I ask Ms Ermacora to continue, in silence.

Jacinta ERMACORA: It is obvious that the previous plans for the day were not going to be supported, so they changed their minds at the last minute. It just is hard to imagine any sense of order in the party room of those opposite.

The opposition’s motion is concerning, because it contains a long list of inaccuracies about the state’s fiscal position and about the budget processes and about financial management and errors of basic financial literacy. The first paragraph’s claims about the state of the budget are completely incorrect. The budget’s position for this year is a surplus, and we are forecast to deliver a surplus in every year of the forward estimates, delivering on step 3 of the government’s five-step fiscal strategy. What we see here is the demonisation of ordinary financial management activities of the state – demonisation of an ordinary instrument used in the financial management of the state. Let me give you an example of that. When I was on Warrnambool City Council it was not uncommon for the council to issue a letter of comfort to a sporting club that was upgrading its sporting facilities and taking out a loan to do so – a perfectly normal instrument to support your community and to support the activities of various different entities. The other scenario that I remember a letter of comfort being used in was in the context of a merger where financial systems had not yet been aligned, and away they went. There was an instrument used for the first year of the financial management. I really think that with the kind of freaking out that is going on, you are trying to contrive this sort of terrible, terrible thing, that letters of comfort have been used in various different situations, when in actual fact they are a very normal and common and accepted instrument in ordinary financial management exercises.

When we do think of the financial position of Victoria, I would like to say that Victoria’s economy is resilient and strong and continues to grow and is 29 per cent larger than in 2015, 10 years ago. In terms of jobs, over the year December to December the number of Victorians in work increased by 59,300 in Victoria. You over there have been saying how bad our economy is when jobs are being created all of the time, and that figure is the highest number of jobs among the states for the last 12 months. Victorians are participating in the jobs market at a higher rate than in most other states, and that is also a strength. Our participation rate is second only to Western Australia. Our unemployment rate is 4.6 per cent, and before you get wound up about that, compared to 4.1 per cent nationally and 6.7 per cent in 2014, when you guys last left office. If our participation rates were the same as in New South Wales, our unemployment rate would be less than 1 per cent. Just consider that for a minute.

We have also got good news in regional Victoria, where unemployment is even lower. It is 3.4 per cent across all of the regions of Victoria, compared to 5.9 per cent, which is nearly 6 per cent, in 2014. It is lower particularly in Warrnambool. It is only 2.8 per cent in Warrnambool and 3 per cent in Hume, and Geelong is 3.3 per cent. So we have got a really good story to tell there in terms of the financial position of the state of Victoria in that regard.

Members interjecting.

Jacinta ERMACORA: I can hear laughter, but I really think you are just trying to make up something. I think that is a bit rude. Your tone is a bit rude.

Members interjecting.

The ACTING PRESIDENT (Gaelle Broad): Order! Ms Ermacora does not usually interrupt others, so I ask that the same respect be shown to her.

Jacinta ERMACORA: In closing, we will have a look at what is going on in business in Victoria. Household consumption has increased by 0.5 per cent. That is running at 2.1 per cent despite consumer sentiment nationally slipping a little bit at the moment. We have created 123,000 new businesses, and that is a net figure. There are a lot of people in this chamber that understand that exactly, but I will point out that that is the total number of new businesses started minus the total number of businesses closed. It is positive to the tune of 123,000 new businesses. That is a sign of confidence in the state of Victoria – the exact opposite to what you are saying over there day after day. I wish Mr Davis was listening because, honestly, he is saying the sky is falling in but 123,000 people invested in new businesses in Victoria from June 2020 to June 2025.

It is a very strong picture there. I could go on, but I will not because I have run out of time. There is more good news, but I have not got time to share it with you. I really think this motion is totally contrived to try and turn something that, as I have said, was a perfectly acceptable financial instrument into some catastrophic sort of blank cheque rubbish. That is not true. In most cases when a letter of comfort is used, it is not drawn upon.

 David DAVIS (Southern Metropolitan) (15:47): This is a very straightforward motion but an important motion. The government members are trying to tie themselves in knots because the motion is put together very moderately. It does not take a huge whack. It just points out that there are financial problems. It points out these issues with using letters of comfort, and we have readily conceded that there are appropriate uses for letters of comfort. But we really do want greater detail out of the Treasurer on this, and there is some real resistance from her in telling us how many she has signed and how many have been provided by other bodies within government, perhaps secretaries, perhaps others, which have underpinned these organisations being able to claim that they are going concerns.

Let us be clear about this. There seems to be a cascade of issues here. Sometimes there are new injections of money at the last minute, sometimes there are Treasurer advances, sometimes it seems that the government has provided indications and letters of statement or information to agencies, to boards, to enable them to feel comfortable short of a letter of comfort and in other cases, many, many cases, formal letters of comfort have been provided to the agencies to keep them as going concerns.

Mr Puglielli was quite right when he said this motion is mainly a series of four statements of fact. These are all facts that are listed on these points here, but they do give a genuine cause for concern, a cause to look at these matters and to say the state has to be careful here. We are actually in real financial problems. Some of them on the other side want to say it is all hunky-dory. Actually the debt level is the highest it has ever been in the state, and it is getting worse and worse and worse. If it is $1 billion or $2 billion less than what had been suggested in earlier government documents, that is regarded as a major win by certain people on the other side, but actually the debt is still going up very significantly, and we know that it is going to exceed $190 billion by the end of the forward estimates.

That is a huge whack of money, and that is the general government sector. If you count the outer sector, it is actually much greater still. But we also know that the government’s skint arrangements are actually seeing these letters of comfort become more and more important and more and more widespread.

We heard from a number of government members, ‘Oh, there’ll be cuts, there’ll be cuts, there’ll be cuts.’ Well, let me just tell you, in my portfolio under this government there are savage, savage cuts in the arts going on at the moment and in the night of the long knives that occurred just before Christmas. This is Scrooge-like behaviour by Creative Victoria. The calls went around to the Abbotsford Convent, which received $200,000 a year for more than 20 years to support that arts hub. Their funding from the end of the financial year has been cut to – how much? – zero. Nothing. No document provided to them, just ‘Your funding’s gone. It’ll be zero.’

Writers Vic has been funded in Victoria since 1989. They had a call, and the call said, ‘Your funding of $150,000 a year’ – that is $600,000 over four years; it is a very modest amount of money that actually facilitates large numbers of writers across this state, and Creative Victoria called them just before Christmas, a Scrooge-like call – ‘has been cut to zero.’ Nothing. We are the only mainland state that does not fund its major writer organisation. So do not let us hear about cuts from that side. Your government is cutting and it is cutting hard. Musica Viva gets very modest funding from Victoria for schools programs. That has been cut to – you guessed it – zero under this government.

I could go on. You are getting the theme that this government is a nasty government. It is a government that has botched the finances of the state. It is going into deeper and deeper debt. The Jacinta Allan Labor government is cutting and cutting and cutting hard, and it is doing it right across the whole front. And now we see letters of comfort that are designed to skate the government through its cuts. (Time expired)

Motion agreed to.

[The Legislative Council report is being published progressively.]