$805 million dollar deficit raises fresh concerns over Victorian Budget

An $805 million deficit just three months into the new financial year has cast serious doubts over the state of the Victorian Budget, despite the government standing strong.

Fresh doubts have emerged about the state of the Victorian Budget after the government recorded an $805 million deficit through the first three months of the financial year.

The quarterly financial report, released on Friday, revealed the concerning three-month deficit after five years of surpluses at the same point since Labor came to power.

The government says “caution needs to be taken” in interpreting the figures — which do not include expected windfalls from land tax and Commonwealth grants — and that the Budget is still on track for another strong full-year surplus.

But the report will likely fuel internal Labor concerns about the state of the Budget.

Treasurer Tim Pallas ensures the state was maintaining its AAA credit rating. Picture: Mark Stewart

With revenue for the quarter at $16.5 billion, the report said that was 23.2 per cent of the estimated full-year budget and was “consistent with previous years and expectations for the current year to date”.

The government had booked surpluses of at least $400 million through the first quarter of each financial year since 2014.

Treasurer Tim Pallas said Victoria was maintaining its AAA credit rating and a strong surplus for the full year.

“We are not immune from national and international forces, but our economy continues to perform strongly because of our record infrastructure pipeline and strong financial management,” he said.

“We’re well placed to weather the global uncertainty that is affecting economies across Australia and the world.

“Under the Andrews Labor Government, Victoria’s economy has continued to grow well above its long-term average.”

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But Shadow Treasurer Louise Staley: “This is clear proof that Labor cannot manage money or projects. Victoria’s budget is in the red and is there for all to see.”

“Tim Pallas said our grandchildren would be paying off this debt, and at this rate their grandchildren will still be paying it off,” she said.

Mr Pallas has called on the federal government to stimulate the economy as “Victoria can’t do the heavy lifting alone”.

It comes after Australian Bureau of Statistics released on Friday showed Victoria’s gross state products grew by 3 per cent in the 2018-19 financial year.

The results were fulled by business investment and public consumption, more people finding a job in Victoria over the last 12 months than any other state.

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