James Campbell: The state budget’s promise of spending restraint is simply not believable

The Treasurer is forecasting spending to drop across a range of departments, but given the history of the Andrews-Allan government many will laugh at the barefaced cheek they are now being asked to swallow.

Victorian Treasurer Jaclyn Symes’ first budget promises spending restraint. Picture: Asanka Ratnayake

Confronted with this budget’s assumptions of spending restraint over the next four years, the commentator is faced with a difficult choice.

Either you can describe it as a horror budget that will see departmental spending slashed over the next four years.

Or you can just laugh and shake your head at the barefaced cheek they are asking Victorians to swallow.

Personally after more than a decade of the Andrews-Allan government it is clear to me it’s a waste of time relying on the budget papers to forecast what is actually going to happen with government spending.

They do, it is true, contains useful information about what has actually happened and changes in the government’s assumptions.

But as a guide to the future? Yeah, nah.

Jaclyn Symes handing down her first state budget in parliament on Tuesday. Picture: Valeriu Campan

Anyway for those who still want to believe, here are some of the numbers offered up for the movement in total expenses from transactions by portfolio department by 2028-29, which show: Education spending in four years will be $199 million lower, Energy $386 million lower, Families Fairness and Housing $578 million lower, and Transport and Planning $677 million lower.

You get the picture — and remember these are just the nominal estimates – if followed through these cuts will much much bigger in real terms.

True, not all the department’s spending is predicted to shrink.

Health spending for example will grow from $33.45 billion to $34.38 billion – which is 2.7 per cent but still a big cut in real terms.

How believable are these targets?

Before you answer that question, first have a look at the difference is between what this government said last year it was going to spend over the following two years, and what it thinks at the moment that spend will be.

Jaclyn Symes at the media budget lockup on Tuesday. Picture: Asanka Ratnayake

Let’s start with health.

According to last year’s budget’s output summary of departmental objectives, health spending in this financial year was meant to be $27.2 billion, which has blown out to $30.6 billion.

If you believe this number, from here it will only grow to $31.1 billion next year.

In other words from last year’s budget to where they reckon we will be on 30 June next year is an increase in health spending of 14.5 per cent.

It’s a similar story at Education – which will be up 6.2 per cent, Transport 8.8 per cent, Energy, Environment and Climate Action 8.3 per cent and Justice 6.3 per cent.

Perhaps a simpler way of judging whether the targets in this budget will be met is to compare the estimates of future government spending which were unveiled today and the estimates unveiled by Jaclyn Symes’s predecessor Tim Pallas.

In last year’s budget Pallas claimed that health spending in 2027-28 would be 27.3 billion, today Symes reckons it will be $33.7 billion.

All of which is a long way of saying that in the absence of some unforeseen growth in the government’s tax take – maybe a critical minerals boom – the government’s promise that Victoria’s debt net will grow from $155.5 billion this year to ‘only’ $194 billion by 2028-29 – which even so will mean almost 10 cents in every dollar is going on servicing it — well it needs to be treated with the scepticism children treat a promise that next year we are definitely going to Disneyland.

Originally published as James Campbell: The state budget’s promise of spending restraint is simply not believable