Andrews government accused of blurring budget figures

Dan Andrews says he “may find time” to read a report that accuses the government of hiding the state’s true financial plight.

Premier Daniel Andrews says he “may find time” to read a report from Victoria’s independent budget watchdog that accuses the government of hiding the state’s true financial plight.

The Sunday Herald Sun revealed that the Parliamentary Budget Office had accused the government of scrapping or modifying most of its own fiscal targets; burying key details to make it harder for Victorians to properly monitor its financial performance; and failing to be transparent on its debt position.

Deputy Liberal Leader David Southwick said the secrecy was “designed to cover” the government’s “mess”.

“This is shocking ... the independent umpire has blown the whistle on this government and their secrecy,” he said.

Asked about the accusations that his government was not transparent, Mr Andrews said “that’s not my view”.

“That’s not the reality. It’s also not the history of our time in office,” the Premier said.

He said that while the budget office was free to have its views, the Victorian Auditor-General officially oversaw “the public accounts of our state”.

“We produce budget papers every year that are signed off by the Auditor-General,” he said.

The budget office provides “independent fiscal, economic and financial advice” to all Victorian MPs.

Mr Andrews said he had not read the report yet but “may find time to”.

The report by the Parliamentary Budget Office has accused the government of:

SCRAPPING or modifying most of its own fiscal targets;

BURYING key details to make it harder for Victorians to properly monitor its financial performance;

FAILING to be transparent about the government’s debt position;

DEFINING fewer targets, and less clearly, than before than pandemic; and

IGNORING recommendations made by the parliament’s budget watchdog.

The Andrews government has been accused of hiding the state’s true financial affairs. Picture: NCA NewsWire/Sarah Matray

“Crucially, four-year forecasts in the budget are not sufficient to show when the government expects net debt to peak or stabilise,” the report found.

“This has increased in importance given the layering of the long-term economic and debt impacts of the Covid-19 pandemic with larger transport infrastructure projects.

“Recent Victorian budgets have not presented a transparent and cohesive fiscal framework.

“Components are spread throughout the budget papers, and are vague, making objective assessment of performance difficult.”

The report is set to spark major concerns over the openness of the Andrews government and its financial management with budget forecasts expecting net debt to climb to a record high $156bn by 2024-25, or 20.3 per cent of the state’s economy, significantly higher than the government’s 12 per cent target. The report’s release follows concerns by a number of MPs about the government’s budget process and is set to lead to calls for an overhaul of the way the government reports its financial position. One political source told the Sunday Herald Sun the budget figures were simply not transparent.

“The spin is in overdrive,” one source said. “The budget papers aren’t doing the best to tell Victorians what’s going on.

Treasurer Tim Pallas delivering his budget speech at parliament in May. Picture: Sarah Matray

“The overarching transparency is lacking, and with net debt where it is we’re looking at an intergenerational dilemma.

“It’s really not acceptable.”

The report warned that as debt climbed, longer projections were vital to assessing the long-term fiscal implications of current policy and infrastructure decisions. But it said it was being hampered in doing its work because of constantly changing targets that made the state’s true financial position difficult to properly assess. It also warned the current practice of four-year forecasts was no longer sufficient.

“Across successive budgets, we found a trend of modified or abandoned fiscal targets and objectives when economic and fiscal circumstances have changed,” it said.

“They have often not remained in place for a sufficient period to be useful or credible.

“In the Victorian budget 2020-21 – the first to reflect the impacts of the Covid-19 pandemic – the government modified or abandoned most of its fiscal targets.”

The report also found that of the six recommendations the parliament’s public accounts and estimates committee had made to improve budget processes, none had been adopted by the government. That committee will hold public hearings next week into the financial and performance outcomes of the 2020-21 Victorian budget.