How Victoria’s soaring debt could fund thousands of frontline workers

Victorians will soon be handing over $26m a day — $9.4bn a year — just to cover the interest payments on the state’s growing debt pile. Here’s the staggering number of essential workers that would pay for.

Tuesday’s state budget revealed Victorians would pay an estimated $31bn just in interest payments to service its growing record debt over the next four years.

It’s a massive figure, just over what the government has paid in interest fees since coming to power in 2014.

By 2027-28, Treasurer Tim Pallas expects the government will be on the hook for $9.4bn a year in payments, a staggering $25.8m every single day.

With so many numbers among the 1000 pages of the budget, it can be hard to make sense of them all, or appreciate the impact they have.

To put it into context $9.4bn – one year’s interest payments – would be enough to fund 11,856 police recruits every year for a decade.

It would also pay for 10 years’ worth of wages for 10,769 graduate paramedics, 11,574 nurses

or 12,168 teachers.

Tim Pallas delivering the state budget. (Photo by Asanka Ratnayake/Getty Images)

Shadow Treasurer Brad Rowswell said “every dollar wasted on servicing Labor’s record debt” was one less to fix the health crisis, boost our economy, improve learning outcomes for students and ease cost-of-living pressures.

Credit ratings agency Moody’s on Tuesday said the enormous debt, and seeming inability to get it under control, jeopardised the state’s credit rating.

A downgrade could make it more difficult for the government to borrow money – and increase interest costs.

“We do not expect Victoria’s debt burden to stabilise before the end of fiscal 2028, maintaining negative pressure on the state’s rating,” it said.

Mr Pallas, when asked today about the government’s plan to actually pay down the debt and consequent interest bills, defended the government’s strategy.

“We’ve probably demonstrated pretty clearly that as a government we have got a very clear road map in terms of how we deal with state debt,” he said.

Premier Jacinta Allan on Wednesday said major frontline workforce shortages and budgetary pressures had forced the government to pause major commitments, including free mental health services and the rollout of pre-prep.

“We can’t stubbornly plough on and open these facilities without the staff to support them,” she said.