The Victorian 2021-22 budget highlights the state’s decline over the past decade aided by lax national policy prioritisation. Sadly, the drivers of the fiscal erosion are mostly unrelated to the Wuhan pandemic. The scorecard is not flattering:

• Net debt, unfunded super and miscellaneous liabilities projected to rise to $241 billion (41 per cent of GSP) by 2024-25 for the non-financial sector, a three-fold increase since 2015-16.
• Cumulative cash deficits over the budget outlook of $133 billion.
• Tax increases achieved via inefficient/distortionary stamp duties, land taxes and payroll tax changes.
• Public service payroll growing at 5.4 per cent nominal for the 10 years to 2024-25. The actual public sector workforce growing at around 2 per cent.
• An infrastructure program lacking micro foundations described by the Victorian Auditor General as overestimating benefits, underestimating costs, and deficient in technical standards (such as engineering standards and network integrity controls).
• AAA credit rating lost in February as Moody’s downgrades to AA1 and changed its financial outlook to “negative”.