Shannon Deery: Tim Pallas’ Budget heralds years of pain for Victorians

The best the Andrews government could hope for is to spin this as a Robin Hood budget but, instead of giving to the poor, it takes from the wealthy and will inevitably hurt those struggling.

It took Tim Pallas an hour to talk through his ninth budget at a media briefing on Tuesday.

In that time, Victoria spent another $400,000 on interest payments.

With interest now costing $10m a day, we are paying $400,000 every hour of every day to service our record debt.

Despite cuts across the board and billions of dollars in new taxes revealed in this year’s budget, there is no sign that our debt predicament will get any better.

Indeed, net debt is set to rise to a record $171bn by 2026-27, stabilising at 24 per cent of GSP.

There will be no immediate hit to the state’s debt position.

But two new levies, on businesses and holiday home owners, will seek to raise more than $8bn for government coffers.

The government says $30bn is the result of Covid, which means much of the rest can be attributed to major project blowouts and questionable spending. Picture: Nicki Connolly

It will be ten years of pain for Victorians already paying more tax than any other Australians.

Families with investment properties will take a big hit, forced to pay thousands over the forward estimates.

They will pay a minimum $5000 over the next decade, with a new $500 annual tax for investment properties with a land value between $50,000 and $100,000.

The payment will increase to $975 for properties with a site value between $100,000 and $300,000, while a further 0.1 per cent of the land value will be applied to properties worth more than $300,000.

Inevitably, they will pass this cost on to tenants, raising concerns the new levy will only exacerbate the state’s rental crisis.

The new tax on business is another impost on companies already funding the state’s mental health reforms, and subject to new hikes on WorkCover premiums.

Mr Pallas is adamant these companies should pay up,

For a city that, in part, earned its Marvellous Melbourne moniker on the back of a booming business sector, Melbourne now risks throwing it all away.

The incentive to do business here will be far less appealing by the end of the day than it was just yesterday.

If this was a pre-election budget, the government may not have been so bold.

There must be a genuine concern about how the state’s prosperity is fuelled, if businesses decide to pack up and head interstate.

The best the government could hope for is to spin this as a Robin Hood budget: stealing from the rich and giving to the poor.

But it doesn’t do that.

Business and wealthier Victorians may appear to bear the brunt of this budget, but in reality we are all paying the price for the state’s current financial situation. Picture: David Caird

It takes from the wealthy, but it will inevitably hurt those already struggling.

The loss of up to 4000 public sector jobs will also hit Victorian families.

Business and wealthier Victorians may appear to bear the brunt of this budget, but in reality we are all paying the price for the state’s current financial situation.

The government might explain it away as Covid-induced debt.

But it is debt that has risen from $22bn to a projected $171bn since the Andrews government came to office.

The government says $30bn is the result of Covid, which means much of the rest can be attributed to major project blowouts and questionable spending.

Daniel Andrews must know this budget will be a hard sell.

He was on the front foot on Tuesday during an unprecedented charm offensive at Tuesday morning’s media briefing.

He knows Victorians won’t like being asked to pay for a situation largely created by his government.

They also won’t like being told ahead of the election we could have it all, when this budget shows very clearly we can’t.

But he’s confident that he can sell the budget as just some temporary pain.

Whether voters agree with him or not doesn’t matter for now.

The next election is still three years away.