It's a numbers game for Premier Ted Baillieu

IT's been two years since Ted Baillieu led the Liberals to a shock election victory and the Premier defends its record of achievement

Ted Baillieu

IT's been two years since Ted Baillieu led the Liberals to a shock election victory and, while his Government cops criticism for its quiet approach, the Premier defends its record of achievement

Sitting on the couch in the anteroom to his office, Ted Baillieu might look relaxed. But he is full of fighting talk.

He might have the mid-term blues, following mounting criticism from the business community that he needs to get busy. But the Premier is making it clear he's not about to change direction.

"We have done exactly what we said we were going to do," he said.

"We have delivered across the board in the areas we said we were going to deliver. We've focused on very substantial reforms, which will be lasting in Victoria; plus, we've led the way on a range of issues."

To mark the second anniversary of his shock 2010 election win, the Premier yesterday welcomed the Herald Sun to his office to talk about what he had achieved in his first two years and what he still hoped to do.

Much of the talk is focused on money: the money Labor wasted, the money the Commonwealth has short-changed Victoria, and the value for money he says he is determined to get for Victorian taxpayers.

Asked what his legacy would be if he lost office in 2014, Mr Baillieu starts with the money.

"We have stabilised an unsustainable Budget position, and that's important - I know that's not necessarily sexy," he said.

Fixing it has been his biggest challenge - after the devastating floods during his first months in office. There have been "massive write-downs in revenue, most of it coming out of the Commonwealth".

"In the last few weeks the Commonwealth have pulled hundreds of millions of dollars out of programs they had previously signed up to, in health, education - across the board," he said.

"And they've dropped challenges on us on disability insurance, (the) Gonski (report on school funding). They're calling the shots, and we're paying the bills. That's the way they're operating, and it's a pretty unsatisfactory way of operating," Mr Baillieu said.

Not that he has a problem with Prime Minister Julia Gillard personally: "On a one-on-one (level) I can have a perfectly civil relationship, and that goes back to Opposition days, and that's not an issue."

Unlike the politics: "I have not been shy and we have not been shy about leading the charge on a lot of issues and that's caused some abrasive debate. But personal level, that's separate."

The Premier has repeatedly made it clear: the Commonwealth will need to come to the party if the east-west link and Metro rail tunnel are to be built.

"Half our revenues come from the Commonwealth, so our capacity to fund projects does depend on the Commonwealth and that is a fact. It was a fact under the previous government ...

"That's just the way the system works ... but we have to have a dual focus. It's one thing to focus on the funding approach to projects. It's another to focus on the cost of the projects. And you can't allow the cost simply to escalate to the point where they're unaffordable for the private sector to get involved."

When it comes to containing costs, there is no doubt who the Premier has in mind: the powerful building union, the CFMEU.

"They are threatening the economy, they are threatening the reputation of the construction industry. And we have to push back, and we are taking up that fight," he said.

He is scathing about Labor leader Daniel Andrews's reluctance to criticise the union.

"I'm not going to stand idly by. I'm not going to stand shoulder to shoulder with the CFMEU like Daniel Andrews is doing and pretend that they're benign and cheerful community members."

LABOR, says the Premier, wasted its years in office.

"They had an opportunity, when they had money, to invest in critical infrastructure, and it didn't happen. We could have had the east-west link now - but we've got a desal plant. We could have had substantial grade separations -- we've got the north-south pipeline, which does nothing.

"Desal is going to cost us somewhere between $18 billion and $23 billion over the next 27 years. So let's say a billion dollars a year for 20 years.

"A children's hospital will cost us a billion dollars. Would you rather have the desal plant, or another 20 children's hospitals?"

Unprompted, Mr Baillieu reels off a list of projects now going on in the state:

"There's $5.8 billion worth of investment happening right now. There's $40 billion worth of projects under way in Victoria right now, record infrastructure funding this year ... It is happening. The port capacity expansion is happening; the grade separations are happening; the comprehensive cancer centre - reconfigured - is happening; the Bendigo Hospital, the Ballarat and Geelong hospitals, other hospitals, are happening.

"There are projects through the regional growth funds - some 600 projects which have been ticked off. Many of those are currently under way, and there's a lot of the things we promised to do, we've done," he said.

Asked what he would do differently after two years in office, the Premier sidesteps the question.

"When you are in this office, you have to fight, because you've got to fight to get a result," he said.

"In Opposition you can be critical, but you don't have the opportunity to achieve. Now we are fighting for a better deal for Victoria from the Commonwealth."

As the interview winds down, the fighting talk heats up: "We have taken up the challenge on construction costs. We've taken up the fight on the CFMEU ... we've taken up the fight on OHS (occupational health and safety).

We've taken up the fight on appropriate funding arrangements. We've taken up the fight on the GST distributions - it was Victoria that led that. We've got an inquiry now, because Victoria took up the fight."

As for those anonymous backbenchers who have recently been mouthing off in the press about his leadership style, a slight smile crosses the Premier's face: "I think I've read the story once a year every year for six years, and I think it's pretty much had the same content."