Daniel Andrews wrongly says council rates to blame for Victoria topping nation for tax

Daniel Andrews has been left red faced after wrongly blaming council rates for a report showing Victorians pay the highest taxes.

Premier Daniel Andrews has been left red faced after wrongly blaming council rates for a report showing Victorians pay the highest taxes in the country.

New Parliamentary Budget Office figures show the state government will collect an average of $5074 per person in 2023-24, hundreds of dollars more than second-placed NSW which is set to levy $4708.

Mr Andrews on Sunday slammed the PBO report, arguing it unfairly included council rates in its analysis.

“You’ve got a report that I think includes the council rates … Fancy trying to be critical of the leader of a state government about taxes and charges that are levied by an independent level of government,” he said.

“That’d be about the same as holding me to account for income tax that’s paid to Canberra.”

Victorian Premier Daniel Andrews says council rates skewed the figures. Picture: NCA NewsWire / Nicki Connolly

But the PBO did not include council rates in its calculations.

The government later confirmed Mr Andrews was wrongly under the impression that it did, after a separate report from the Australian Bureau of Statistics last month showed Victorians paid the most in state government and local council charges.

Mr Andrews suggested total revenue per person – including other factors such as resource royalties and GST distribution along with taxation – would be a “better measure of these issues”.

Using that measure, Mr Andrews claimed Victoria would be second lowest for tax after South Australia.

But he reaffirmed the need for Victorians to help pay back “emergency borrowings” for the pandemic on the so-called “Covid credit card”.

“Otherwise our kids and grandkids are going to be left with $31.5bn of debt that they’re deriving precisely no benefit from,” he said.

“Covid debt, in terms of masks and vaccines and testing sites, that’s gone, and needs to be paid back.”

Leader of the Opposition John Pesutto said families were being punished for ballooning debt levels. Picture: David Crosling

Mr Andrews again sought to separate Covid debt from the state’s soaring spending on infrastructure.

“That’s (infrastructure spending) productive borrowing. That makes the economy bigger,” he said.

But Opposition Leader John Pesutto said Victorians were “getting nothing” in return for paying the highest taxes in the country.

“It’s not fair that Victorians are paying so much tax. They’re getting certainly getting nothing for it,” he said.

“Debt is going up, and taxes will continue to rise over the full distance.”

Mr Pesutto also warned further credit rating downgrades were looming for the state if the government continued to splash cash on infrastructure projects.

Standard and Poor (S & P) currently gives Victoria an AA rating — the lowest of the states — while fellow credit agency Moodys places the state at Aa2, which is two levels below their top tier.

Mr Pesutto said another downgrade would be “disastrous” and again urged the Andrews government to reconsider the $125bn Suburban Rail Loop.

Mr Pesutto did, however, throw support behind the North East Link and long-awaited Airport Rail.

“This is the second time the Andrews government will have ditched the Melbourne Airport Rail so there are worthy projects,” he said.

“If we had the capacity to deal with them all, we would, but right now, the government needs reprioritise.”