Under Labor there’s more to build, less to make, and we’re poorer than before
The engine of Victoria’s growth under Labor has been turbocharged but the spending has left a massive interest bill, as well as the highest taxes in the nation. Ex-premiers Steve Bracks and Jeff Kennett give their verdict on Labor’s decade of power.
Victoria
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Victoria is bigger, more diverse, and far more dependent on state spending than it was when Labor came to office a decade ago.
And while Victorians’ incomes are higher today than they were in 2014, their income has grown more slowly than people in other states, meaning we are relatively poorer to the rest of Australia than we were 10 years ago.
The engine of the state’s growth under Labor has been turbocharged and debt-financed infrastructure spending, which began soon after Daniel Andrews took office pledging to remove 50 level crossings across Melbourne.
This spending, which saw debt start to rise sharply even before it exploded during the Covid-19 pandemic, has left the state with an enormous interest bill that will soon require repayments of $25m-a-day, as well as the highest taxes in the nation.
It has also masked weakness in private sector investment in the state.
Victoria’s economy was quite different when Daniel Andrews became premier.
Before Labor won the 2014 election all three car makers had announced they would soon leave Australia but Ford, Holden and Toyota were still making cars in Geelong, Broadmeadows and Altona.
Other manufacturers soon followed the car makers, including Murray-Goulburn Dairy, General Mills, Buffalo Trident, Nestle, GSK Australia Pharmaceuticals, Advance Bricks, Pavers, Saputo Dairy, Opal Australian Paper, Bosch and Seeley International – some blaming high energy prices on the way out.
For the past decade Labor’s focus has been its so-called Big Build – a name borrowed from Boston’s Big Dig project of the 1990s – the centrepieces of which included level crossings removals, a Metro Tunnel, a West Gate Tunnel, and more recently, a North East Link.
Smaller projects, including 75 new schools, were also jammed into the bulging public sector construction pipeline.
The Metro Tunnel and the West Gate Tunnel are more than $8bn over budget in total, while the North East Link has already blown out by $10bn.
Going full steam ahead with public sector infrastructure came at a cost, including soaking up industry capacity needed for private sector works such as housing projects, but Daniel Andrews made a virtue of declaring “things cost what they cost”.
At the same time the militant construction union the CFMEU was allowed to take control of projects, dictating which companies got work, which in turn opened the door to organised crime and bikies on sites.
Early in its first term, the novice Andrews government was plagued by scandal.
Corrections Minister Steve Herbert resigned in 2016 after the Herald Sun revealed he’d been using his chauffeur to ferry his dogs Patch and Ted between Melbourne and Trentham, and Labor’s speaker and deputy speaker, Telmo Languiller and Don Nardella, resigned after rorting a taxpayer-funded allowance.
There were also revelations in the Herald Sun that the ALP had misused hundreds of thousands of dollars in MP allowances to fund a campaign team who wore red shirts during the 2014 state election.
But two other issues were commanding most of the premier’s attention, including his decision to tear up contracts for the Napthine government’s East West Link tunnel.
Andrews had been nervous about making the pre-election promise to dump the project at the behest of inner city MPs, sweating heavily at a press conference to announce the decision.
One of those MPs was Jane Garrett, who Andrews made emergency services minister but soon fell out with United Firefighters Union boss Peter Marshall over demands he be given effective control of the Country Fire Authority.
Garrett stood her ground and sided with volunteers who resisted a union takeover, but Andrews sided with Marshall and did a deal.
The CFA dispute, which saw CFA board sack and its senior management quit, came in the middle of a federal election campaign that saw Bill Shorten come within a whisker of unseating prime minister Malcolm Turnbull, who was left with a one-seat majority.
None of it made any political difference, and Andrews was re-elected in a landslide in 2018.
Growth in the public sector continued from that point and the economy kept ticking over despite a stark decline in manufacturing, as new arrivals flocked to Victoria.
But the eruption of Covid-19 and lockdowns that decimated the economy derailed Labor’s plans and put a strain on hospitals that had been papered over prior to the global disaster.
Former Labor premier Steve Bracks says the recovery from the pandemic has been strong with Victoria’s economic growth stronger than NSW, Queensland, WA and Tasmania.
But economist Saul Eslake points out that per capita household income has dived and sits only narrowly above South Australia and Tasmania.
In other words, Mr Eslake told the Herald Sun, “Victorian has become a poor state over the past 10 years”.
As the state’s finances declined, Labor opted to try to tax its way out of a budgetary hole.
Opposition Leader John Pesutto points to 56 new or increased taxes since 2014, while slamming skyrocketing net debt that approaches $188bn.
“Victorians are paying among the highest taxes in the nation, services are declining, roads are crumbling, and major projects have blown out by more than $40bn,” he said.
Premier Jacinta Allan last week said the government had created a stronger economy, however, pointing to the number of jobs created under the party’s watch.
“We have a stronger economy, we have a bigger economy, we have more people in work,” she said.
Ms Allan took the role of Premier after Mr Andrews retired last year, shortly after announcing the contract he struck for the 2026 Commonwealth Games had been ripped up.
That decision reverberated around the world, putting a question mark against the state’s sterling reputation for hosting major sporting events.
At the same time the reputation for secrecy has been enhanced, from the fallout of the Lawyer X scandal to the suppression of basic information.
A hallmark of Mr Andrews’s time in power was his capacity to ignore critics and focus on the things he believed mattered to voters, winning two elections with improved majorities.
Since Andrews left office, the scale of spending problems has become clearer, at the same time as voters have been feeling the pinch after a prolonged cost of living crisis.
Emeritus Professor of politics at Monash University, Paul Strangio, said once Labor is elected in Victoria it has proven difficult to dislodge, although history had shown – such as during the Cain/Kirner and Bracks/Brumby eras, that “winning a fourth term in 2026 might well be a bridge too far for Labor”.
He said the current Labor reign was “the most consequential period of Labor governance in the history of the state” due to the supremacy of Daniel Andrews and policy activism, which has ushered in sweeping social reforms including voluntary assisted dying, a drug injecting room and a process to establish a Treaty with Indigenous communities.
At the same time, he said, a hapless opposition has allowed Labor to assume the position of a one-party government state.
“The overriding question in Victorian politics now and for the next two years is whether the Liberal Party can present as a viable alternative government,” he said.
In November, 2026, voters will have the chance to extend Labor’s mortgage over the government in this state, or opt for a fresh direction.
Former Victorian premier Jeff Kennet’s report card on the state after 10 years of Labor
Triple F
Because the interest payments on our debt are so large every week, it reduces monies available to the government to maintain our services, and taxes. Charges are increasing beyond the capacity of many families and businesses to pay.
D
Sadly Victorians are increasingly concerned about their personal safety and their property. The government are being seen to side with the offenders.
C+
Should be a given that Victorians can gain access to the best public health facilities which are fully manned. Hospitals should be appropriately funded.
D
If you cannot provide an examination system for those completing their education, what is the point of conducting exams? It reflects on the whole education system.
B
It’s important to keep hope alive as the state sinks into the abyss. It helps divert Victorians for a moment of time from the issues that are causing them pain.
F
Important, but should be addressed on a rolling basis when the state can afford such expenditure. And this should only be when such expenditure can be professionally managed. Neither have been achieved and it’s a major reason for the debt blow out.
Overall
F
This is the most damaging government in Victorias history.
Former Victorian premier Steve Bracks’ report card on the state after 10 years of Labor
B
Victoria’s economy is booming because of the Allan Labor government’s investment in vital infrastructure and services. – delivering a strong economy and a better future.
B
The government has strengthened bail laws, reformed the youth justice system and is giving police extra powers to crack down on knife crime and organised criminals.
B
Victoria’s health system is world class. The government has redeveloped and built hospitals across the state. The health services workforce has grown by almost 50 per cent since 2014.
A
Victoria has the best primary school NAPLAN results in the country and has introduced explicit teaching and phonics into every classroom.
A
Our pipeline of iconic, international blockbuster events is the envy of the country.
A
The government has built new rail lines, sations and roads and removed level crossings, reducing congestion and cutting travel times for millions of Victorians.
Overall
B
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