Every Victorian owes equivalent of $19,500 in gov debt quagmire
The state government’s debt pile now weighs in at $19,500 for every man, woman and child, with the local bill overtaking the federal per capita figure for the first time in more than a decade.
News
Don't miss out on the headlines from News. Followed categories will be added to My News.
The state government’s debt pile is the equivalent of every Victorian owing $19,500, with the debt per person figure overtaking the federal government’s burden for the first time in more than a decade.
Victoria’s net debt has increased by almost 10-fold since before the pandemic, surging from $2,500 in 2018-19.
Net debt per capita is now on track to surpass $25,000 by 2027-28, according to a new report by the Parliamentary Budget Office.
Federal debt per person is tipped to rise from $18,400 in 2024-25 to $24,300 in 2027-28.
Victoria’s per capita debt burden will overtake the federal government’s in 2024-25 — driven by major projects like the Suburban Rail Loop and massive Covid spending.
The last time Victorian debt per person was higher than the Commonwealth was in the mid-2000s.
Total debt owed on average by Victorians is on track to land just under $50,000 in 2027-28.
Economist Saul Eslake, who is on the office’s expert panel, said the report highlighted the “extraordinary increase” in Victoria’s net debt.
“It’s definitely eye-catching. Victoria’s net debt (projected for 2027-28) is as high as Queensland and New South Wales put together,” he said.
“Victoria has run a bigger operating deficit since 2019-20 on average, than any other jurisdiction other than the Northern Territory.
“This is the legacy of the string of deficits that the Victorian government has run over the past decade.”
Mr Eslake said the Victorian government will be spending $1,200 per head on interest at the end of 2027-28.
“Money that’s spent on interest is money that can’t be spent on hospitals or education or health,” he said.
He recommended the state government cut spending on service delivery and reconsider the number of bid build projects currently being carried out, particularly those that haven’t started yet.
“They’re already increasing taxes, as we’ve seen through the land tax surcharge and payroll taxes.”
The Labor government recently expanded its infrastructure program, including the controversial $100b Suburban Rail Loop, and spent large amounts on support payments during the pandemic and numerous lockdowns.
It comes as the opposition leader John Pesutto announced on Wednesday he would legislate a net debt cap and institute a real-time public spending tracker if the Liberal Party won the state election in 2026.
“We have the highest debt in the nation, we have the highest taxes in the nation and what’s worse, we have no transparency in the way Victoria’s money is being spent on various types of programs,” Mr Pesutto said.
Premier Jacinta Allan said the coalition’s plan would lead to the slashing of frontline services.
“It’s a plan for cuts, it’s a plan for closures, it’s a plan for an American-style debt ceiling,” Ms Allan said on Wednesday.
“You know what you get with an American-style debt ceiling? You have an American-style health system.”
The Victorian government is expected to release a long-awaited economic growth statement in November, which is no longer predicted to include any proposed tax changes.
Dutton’s plan to snag votes: $1200 tax cut for 10m workers
In his boldest pitch for votes since the start of the campaign, Peter Dutton has promised to give more than 10 million workers a one-off tax cut of as much as $1200 next year.
‘Disgrace’: Vandals target Liberal candidate’s campaign posters
More drama has enveloped Amelia Hamer’s election campaign with the Liberal candidate for Kooyong’s posters, office and even a supporter’s home becoming targets of vandals.