Jacinta Allan says state budget will address cost-of-living pressures

Premier Jacinta Allan says her first state budget has been “challenging to put together” but is “sensible and disciplined” with a clear focus on families feeling cost-of-living pain.

Premier Jacinta Allan has described her first state budget as “sensible and disciplined” that will be “firmly focused” on Victorian families.

Speaking on budget eve, Ms Allan conceded difficult decisions had been made in Tuesday’s 2024-25 budget.

“It’s a budget that’s been challenging to put together… in a domestic and global environment which faces many, many pressures,” she said.

“These are challenges we can’t ignore. We simply can’t put our head in the sand.”

Ms Allan refused to speculate on what the budget contained but said she was alive to the struggles faced by many Victorian families.

“We are focused on how we can support Victorian families as Labor governments always do,” she said.

“The budget will be firmly focused on Victorian families.

“With tomorrow’s budget, we will also be taking the sensible and disciplined decisions that we need to make.

“I’m looking forward to the budget being handed down tomorrow.”

Premier Jacinta Allan will hand down her first state budget on Tuesday. Picture: Luis Enrique Ascui

On Sunday Ms Allan flagged that Tuesday’s state budget will “address” the cost-of-living pressures facing families and businesses, but an experienced economist says the government will not be able to shy away from making “tough decisions”.

The Sunday Herald Sun revealed that tourism bodies are bracing for tens of millions of dollars to be ripped from the budget as Treasurer Tim Pallas wields the axe in an effort to rein in spending and curb the state’s soaring debt levels.

While Ms Allan would not be drawn on the nature of any cuts to the tourism sector when questioned at a press conference on Sunday, she said her government was conscious that many Victorians are “doing it tough right now”.

“We can’t ignore the pressures of the pandemic, the global pressures, the interest-rate-rise pressures, the inflationary pressures, we can’t ignore the impact that those are having on households and businesses,” she said.

“That is why in … framing Tuesday’s budget, we are firmly focused on those pressures for households and businesses.”

She added: “We can’t ignore those pressures. We can’t wish them away. We need to address them. We need to work through these challenges with a focus on understanding the cost pressures that households in Victoria are facing.”

But the Premier said she was not in a position to confirm any cost-of-living relief.

“The budget will be handed down on Tuesday,” she said.

However, Mr Pallas in January said struggling families would not be overlooked in his 10th budget, hinting at some new measures that will help with the cost-of-living crisis.

Premier Jacinta Allan and Treasurer Tim Pallas. Picture: Luis Enrique Ascui

Economist Saul Eslake told the Herald Sun the state budget would be an “opportunity” for Ms Allan to show she leads a different government from the one led by Daniel Andrews.

Mr Eslake said he believed that Ms Allan was a premier “who understands the need for tough decisions”, especially given debt is projected to hit $178bn by 2027.

“I would expect to see this budget making some tough decisions about both operating expenses … and also capital expenditure,” he said.

“If the government is going to be serious about charting a credible path back to surplus, putting a ceiling on debt and putting it ultimately on a downward trajectory, it really has to get serious about reigning in expenditures.”

In late April, Mr Pallas said himself there will “have to be hard decisions in this budget”.

According to Mr Eslake, the state government has to get a handle on capital expenditures, namely infrastructure projects, which he described as the “biggest driver of the increase in Victoria’s debt”.

“If there are projects in the forward estimates which haven’t started yet, they could be cancelled or deferred,” he said.

But S & P Global Ratings analyst Anthony Walker said he expected the state’s overall debt position to continue to rise on the back of the state government’s infrastructure program.

Mr Walker said pressure on the state’s credit rating could also rise if blowouts continue on the North East Link, West Gate Tunnel and Suburban Rail Loop.

Mr Eslake added that while it was “not a nice move” to slash funding to the tourism sector, it was not an essential service.

“These are the things you have to do if you’re going to get a handle on debt … without cutting really essential services like health and education,” he said.

“There are a lot of things that state governments spend money on that are not necessarily essential services.”

Hundreds of government programs worth a combined $23bn, including funding for school upgrades, apprenticeships, environmental programs and transport initiatives, are also set to be axed.

Meanwhile, workers in public sectors from health to the Big Build face losing their jobs as part of sweeping cost-saving measures.