Keep an eye on the cash
EDITORIAL: VICTORIANS will be closely watching the Victorian Government as it borrows to find the money it needs to build its mega projects.
Opinion
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VICTORIANS will be closely watching the Victorian Government as it borrows to find the money it needs to build its mega projects.
The Herald Sun’s predictions of a borrowing spree were all but confirmed yesterday as Treasurer Tim Pallas talked of ramping up borrowing.
The Government faces the challenge of financing the Metro rail and tunnel project under the Yarra and the Western Distributor to relieve traffic chaos on the Westgate.
While the former government accuses it of breaking its election promise of not increasing debt, Mr Pallas says debt is below what it was when the Coalition was in power.
What is beyond argument is that Victorian needs the jobs and the services these projects will deliver.
The Metro project at close to $11 billion will provide five new stations as it runs from the north of the city, under the length of Swanston St and deep under the Yarra to the south.
Premier Daniel Andrews is anxious to move on from his irresponsible decision to tear up the contracts on the abandoned East West Link.
That cost Victorian taxpayers $1.1 billion in payouts to contractors and other costs and is money that will never be recovered.
While the Government now has its hand out for at least $4.5 billion in Federal Government money to complete the Metro project, and at least $1.5 billion to build the $5.5 million Western Distributor, Mr Pallas is talking up the case for borrowing much, much more.
The Andrews Government has been reckless and is showing itself to be a slow learner in matters of high finance. Its promise to rid the state of 50 of its most dangerous level crossings requires selling a 50-year lease on the Port of Melbourne.
The $6 billion it expects for the lease has been held up by the Coalition’s opposition to a compensation clause to be paid if a second deep-water port is built during the lifetime of the lease.
The Government believed this would make the deal more attractive to a prospective buyer. But it needs to get the deal done and has accepted a 15-year time frame.
These matters are not lost on taxpayers who watch these machinations with even more attention than usual.
Now Mr Pallas tells us that the Government is prepared to borrow as much as $17 billion over eight years to build its road and rail projects.
Money is cheap at the moment in relative terms, but interest rates don’t always remain the same.
There is also Victoria’s triple-A credit rating to protect to ensure that what we do borrow is at the best rate available.
Mr Pallas, in an upbeat speech to a Committee for Economic Development of Australia lunch yesterday predicted what he said would be a “Henny Penny’’ scare campaign by critics who will say the sky is falling in because of borrowings.
The Herald Sun, like the taxpayers, will be watching just how the Treasurer and the Andrews Government does manage the money it borrows.
It is not the projects that are in doubt, only the ability of the Government to learn from its mistakes. Mr Pallas is asking people to take him on trust.
He better be right.
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EXPENSIVE HOLIDAY
THE Grand Final eve holiday was a crowd-pleaser last year, with more than 100,000 fans lining the parade route to the MCG.
But in the CBD, it was a different story. Businesses were shut and shops and restaurants had to pay penalty rates for staff if they stayed open.
As reported in today’s Herald Sun, the head of the Victorian branch of the Australian Industry Group estimates the holiday cost the state $1 billion in lost income.
Businesses that closed last year lost an average $15,800. Businesses that stay open will pay about $6700 in extra wages this year as well as a loss of revenue from a deserted CBD.
These figures only emphasise findings from a survey commissioned by the Victorian government from accountants PricewaterhouseCoopers that put the loss of economic activity because of the public holiday at $680 million-$852 million. Victoria now has more public holidays than any other Australian state or territory and Premier Daniel Andrews has decided the holiday will stay as long as Labor remains in power.
Melbourne Cup Day on a Tuesday is also a public holiday, but the economic return to Victoria from interstate and international visitors to the race that stops a nation is in the hundreds of millions of dollars.
By contrast, the Grand Final eve holiday costs money and, while Premier Andrews trumpets the turnout, there remains serious concern over just how much it costs.
The government acknowledges there is business opposition to the holiday, but says it is up to businesses whether they choose to open.
The business community wants the holiday considered at least on a year-by-year basis. That is a better call. Let the people decide.
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