Looming May state budget tipped to feature mass funding cuts and job losses
Shadow Victorian treasurer Brad Rowswell has called on the Andrews government to stop wasting taxpayer dollars on major projects, saying it “irritates the crap” out of him.
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Shadow treasurer Brad Rowswell called on the government to stop wasting taxpayer funds on major projects and ensure the next budget does not threaten Victoria’s frontline workers.
“The waste on major projects in this state is sitting at just over $30bn and I’ll tell you why that irritates the absolute crap out of me,” Mr Rowswell said on Saturday.
“It’s because every dollar wasted on a major project is one dollar not invested in the things that matter for Victorians - into frontline services, into nurses in hospitals, into teachers in classrooms, into police working the beat and keeping Victorians safe.”
With Victoria’s net debt projected to reach $165bn by 2026, Mr Rowswell said Victorians would eventually end up paying “$20m a day in interest payments”.
“When the Liberal government was elected in the early 90s, they had $31bn to pay off - we’ve got $165bn to pay off.
“Why does this matter to Victorians? Well, for as long as the government continues to waste, they’re going to increase taxes, they’re going to increase levies, they’re going to increase charges.
“The impact on frontline services that every Victorian relies upon is under threat and at the moment - when families are trying to make ends meet - any change, any increase to taxes, charges or levies in the state is going to make things harder for Victorian families.”
His comments come as it’s revealed funding for grassroots community groups and not-for-profits is set to be slashed as part of a horror budget being prepared by the Andrews Government as it scrambles to rein in the state’s spending.
And with Victoria now paying $10m a day in interest to pay down debt, businesses are also bracing for an increase in state government charges they fear could affect stamp duties, land taxes, licensing costs and workover insurance to help cover the cost.
The budget has been described by government sources as “economic carnage” with every department ordered to find significant savings as Victoria hurtles toward a record debt $165.9bn by 2026.
After days of Daniel Andrews spruiking the need to pay down debt, government sources have warned the looming May Budget will feature mass funding cuts and job losses.
Big business could be forced to pick-up the tab for taxpayers, with a raft of initiatives being canvassed that would impose new levies and charges on major companies to boost the state’s coffers.
Sources say the government is hoping to find billions of dollars in savings through major cuts to community groups, outreach programs and not-for-profits.
“Community groups and not for profits who have done very well out of the Andrews government for a very long time are going to have their funding slashed,” one senior source said.
Maintenance budgets across the health and educations sectors are tipped to be cut, while the government’s building blitz on new schools is considered “dead”.
“We’ll meet all election commitments, but beyond that, it’s over,” a source said.
The cuts are set to lead to major job losses with one source conceding: “a significant amount of public servants over the next 18 months will find they no longer have a job.”
Community and Public Sector Union Victorian secretary Karen Batt said departments were bracing to return to 2018 funding levels and job losses were feared.
These cuts mean they will not have the cash to cover their workforce’s increased wages and entitlements, forcing them to either find other savings or let staff go.
“We’ve got a situation where they are saying to the departments, here’s your funding, it’s less than what you got last year, it’s based on 2018 numbers.
“Most of the work is now piling up, people are doing excessive work.
Departments may also choose not to fill thousands of ongoing vacancies across the public service to save cash.
But it is feared the government could also push through a round of redundancies if it wants to find further savings.
Ms Batt said the government should be sitting down with the union and other groups to work out a detailed plan about what skills are needed in coming years and how public servants could more easily move across departments based on demand.
“Start valuing the service rather than just talking about them as a cost,” she said.
When the Andrews government handed down its first budget in 2015, Victoria had just $22.3bn of debt and was paying $24.2bn a year in public sector wages.
Government debt nudged $100bn last year with government wages rising to $38.5bn.
The Premier this week blamed Covid for the state’s economic troubles.
But critics blame the government’s poor economic management and track record of cost blow outs on major projects.
“Let’s be very clear about this – the budget is not the budget that was delivered five years ago – we will deliver all of our election commitments, every single one of them, because that’s what we do, but we had a Covid emergency and we had to go and borrow money to get through,” Mr Andrews said.
“That money now has to be paid back and I’m not going to have a situation where we simply ignore the reality that interest rates have gone up – they’ve gone up for ordinary, hardworking Victorians across the state and they’ve gone up for the government too – and we will cut our costs accordingly.”
Mr Andrews said the government “will make the difficult decisions” to ensure the state’s debt does not affect future projects.
Mr Pallas this week defended the state’s economic position, saying net debt was dwarfed by that owed by the Commonwealth.
“Our investment has been in Victorians, our investment has been in growth and our investment has demonstrated the value of growing an economy to ensure the debt becomes increasingly manageable,” he said.
“It is a strategy that is working. It is a strategy that is leading the nation in growth. It is a strategy that is putting Victorians back to work in numbers stronger than any other state in the nation.
“That strategy has demonstrated its worth because we put the people of Victoria and their household budgets back into the priority that they deserve.
“As a government, we rate their concerns, and we have used our balance sheet to look after the interests of Victorians, to ensure that they get the support and the
assistance of a government that, effectively, is concerned about making sure that they get through one of the most testing economic times that has confronted this nation.”
Shadow treasurer Brad Rowswell said years of waste, mismanagement and cost blowouts under Labor had driven Victoria’s debt to record highs.
“Victoria is now facing a debt and interest time-bomb, which can only mean even higher taxes and cuts to everyday health, education and community safety services,” he said.
“Victorians deserve better than a tired, incompetent government that can no longer afford to deliver the services Victorians rely on.”
Small Business Australia executive director Bill Lang said businesses were bracing for an increase in state government charges including stamp duties, land taxes, licensing costs and workover insurance.
“While businesses continually seek cost savings to operate as efficiently as possible, this focus on having to manage a small business and your family’s financial wellbeing has not applied to the government that continues to borrow to operate, by putting more on the state’s credit card for taxpayers to deal with in the future,” he said.
Victorian Chamber of Commerce and Industry boss Paul Guerra said ongoing support for businesses needed to be included in the budget.
“The budget must be a mix of cost tightening in State Government expenditure areas and targeted ongoing support for business along with initiatives and reform to support the growth of business,” he said
“The return to an operating surplus must remain a focus, and the most effective path to achieving this is the provision of a successful and growing business environment is the most effective path to achieve that.
“The Victorian Chamber have provided our submission to the State, which provides context on how this can be achieved.”
Australian Industry Group Victorian head Tim Piper said the business community was holding on to hope that there’s be no hidden taxes in this year’s budget.
“The business community is pleased to hear the government is looking at a responsible forthcoming budget, one which does not cause further debt for Victorians,” he said.
“As the Premier has said this will inevitably mean a
reduction in spending by the government. Hopefully this also means that we do not exceed the $165 billion in debt that Victoria is currently facing.
“It is also important that the government recognises the very competitive business environment that Victorian companies are in and that it does not increase business taxes.
“We have seen taxes in Victoria increase considerably to pay for government expenditure. Let’s not have further taxes in this year’s budget.”
Originally published as Looming May state budget tipped to feature mass funding cuts and job losses
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