Terry McCrann: Tim Pallas has built his ‘Wayne Swan Tribute fantasy’ on four unrealistic assumptions

The only number in Tim Pallas’s entire budget that has any credibility is the figure of $167.5bn – yes, that’s “billion with a B” – for state net debt as at June 2026.

Victorian Treasurer Tim Pallas delivers the budget in Parliament House as Minister for Transport Infrastructure Jacinta Allan listens. Picture: Ian Currie

If you believe the fantasy projections in Tim Pallas’s “Wayne Swan Tribute Budget”, I have a beautiful period bridge on a certain harbour north of Victoria to sell you at a bargain basement price – and I’ll throw in the steak knives as well.

Yes, whereas in 2012 Swannie promised surpluses as far as the fiscal eye could see, starting immediately, Pallas hasn’t stretched credibility quite THAT far.

He’s only promising to finally get the budget back into the black, way out in 2025-26.

Even that surplus, though, is as literally unbelievable as any of the ones that Swannie promised and never delivered in his six budgets as treasurer, maintaining untarnished Labor’s federal record of never delivering a surplus since its last one way back in 1989.

Former federal treasurer Wayne Swan speaking during a press conference in Canberra in 2012. Picture: Alan Porritt

The only number in Pallas’s entire budget that has any credibility is the figure of $167.5bn – yes, that’s “billion with a B” – for state net debt as at June 2026.

That would be $25k for every Victorian, by the bye. Or $100k for a four-person household.

But credibility, I would immediately add, only as a BASE figure.

The debt will be at least that, it will certainly be higher and heading yet higher still through the back end of the 2020s.

The only serious question is whether by 2025-26 the debt figure has stayed this side of $200bn.

Pallas has built his “Wayne Swan Tribute fantasy” on four huge, totally unrealistic assumptions.

The least unrealistic is that the Victorian economy zooms straight back to, and then sustains, its pre-Covid rates of growth, pouring ever-rising revenues into the budget.

Victorian Treasurer Tim Pallas is congratulated by Premier Dan Andrews after delivering the budget in Parliament House. Picture: Ian Currie

The budget predicts that state tax revenues will leap $5bn or 17 per cent in just three years.

Good luck with that; but remember the two biggest state taxes are property stamp duty, relying on ever-rising property prices; and payroll tax, relying on a thriving and growing small business sector.

Assumption two is the exact opposite: that the government will keep a tight clamp on spending and especially on the public sector wages bill.

The wages bill is predicted to rise by just 5.5 per cent over the four years to 2025-26; that’s a rise of just 1.3 per cent a year.

Victorian state opposition leader Matthew Guy reads the budget. Picture: Ian Currie

Are you kidding me – and more importantly, every Victorian? Public servants are going to want pay increases alone of AT LEAST 3-4 per cent a year.

And then you’ve got to add on increased numbers – if in no others, at the very least, the health sector and the police.

This goes to the third big assumption: there ain’t going to be any inflation, so public sector employees won’t want higher wages.

The fourth assumption is that there won’t be any further blowout in the massive infrastructure spend. Yeah, right; you can take that to the bank.

Pallas’s tribute budget will end up matching the 2012 original in EVERY way: four years of deficits and a massive — further — debt blowout by the fourth year.

And if as is likely interest rates are much higher than expected – hoped-for – things could get seriously nasty in the garden state.