Victorian economy gets $49 billion jolt with jobs the focus

Credit card in hand the state government is on the road to redemption. But will it be enough?

Can Daniel Andrews and his government spend its way to redemption?

Ultimately that’s what the 2020-21 budget, and two more like it before the November 2022 state election, will answer.

The pandemic’s grip of the Victorian economy means the state is desperate for a financial jolt and that’s what the budget aims to deliver via a $49bn spend.

But to get there Victoria will pull out its credit card, and will spend $23bn more than it earns in 2020-21.

It’s a year when state debt is due to hit $87bn and balloon to $155bn by June 2024.

The government argues the debt is manageable but the opposition says the level of interest to be paid is concerning.

Entire sectors, like tourism and hospitality, have been decimated by COVID lockdowns.

And in the grips of the COVID recession the need is high and borrowing costs are at a record low.

Victorian Premier Daniel Andrews. Picture: NCA NewsWire / Daniel Pockett

Statewide unemployment is due to hit its worst in December as the economy’s guardrails, via JobKeeper and JobSeeker, are wound back.

Treasurer Tim Pallas accused the Commonwealth of short changing Victoria of GST revenue but it could be argued that’s self-inflected because mistakes with hotel quarantine ultimately crippled the state economy and its ability to generate GST revenue.

To get the economy moving the government predicts its jobs plan will get 200,000 back into work by 2022, including 125,000 in 2020-21.

Government jobs spending includes $619m to match people to the right jobs through Jobs for Victoria with $250m of that to be put aside for wage subsidies for 10,000 workers.

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$150m will get 6000 women back into work, some over 45 years old; and $58m will expand opportunities for apprentices and trainees.

About 50,000 places in skills-focused short courses are due to be created at TAFEs and other higher education institutions.

On the home front, there could be a jobs bonanza on our doorstep with $2bn for fast rail, $900m for the Geelong line duplication, and $73m for the Barwon Heads Rd duplication among other infrastructure projects.

Daniel Andrews has two budgets to schmooze the electorate. He’ll be hoping this year’s spend is enough to begin the path to redemption.

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Originally published as Victorian economy gets $49 billion jolt with jobs the focus