Victoria State Budget 2017-18: Treasurer sitting on pile of cash

THE Budget provides a steady increase in funding to core Labor issues like education and health, without any massive surprises that will no doubt be left until next year, writes Matthew Johnston.

Tim Pallas is sitting on a pile of cash thanks partly to property taxes from a hot real estate market. Picture: AAP

• State Budget Special: $2b plan to tackle family violence

TREASURER Tim Pallas should have looked happier outlining his third Budget.

Not only is he already sitting on a pile of cash thanks to property taxes from a hot real estate market and payroll taxes from strong job growth, he’s forecasting a lot more money on the way.

Maybe he was hiding his smiles until election year when the treasurer tends to get a bit looser with the purse strings.

Part of the surplus nest egg achieved by this government is through a neat trick whereby the Treasurer has borrowed billion of extra dollars at historically low interest rates, in order to help fund $38 billion of new roads and rail.

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In defending the borrowing binge, he made reference to federal Treasurer Scott Morrison’s recent remarks that some debt is “good debt” — when it’s used to build things.

Treasurer Tim Pallas. Picture: Tim Carrafa

This Budget has cemented the Andrews Government’s promise to implement recommendations of the Royal Commission into Family Violence.

This is putting its money where its mouth was, and still is.

The Budget provides a steady increase in funding to core Labor issues like education and health, without any massive surprises that will no doubt be left until next year.

Pallas has promised the public service will have a spending haircut of $1.35 billion over four years in a bid to seem like the government is reining in largesse, calling it a “reprioritisation” of taxpayer money.

But at the same time, employee expenses overall are skyrocketing and Pallas says he doesn’t think the overall number of public servants will be reduced.

The usual tax suspects are all going up, including in gaming, property, and in the total payroll take.

Some money is being given back through stamp duty cuts for first home buyers and regional businesses in particular.

There’s no doubt this government has a firm eye on the bush, with part of this Budget about boosting regional rail and setting a different payroll tax level outside of Melbourne.

A number of major initiatives were announced months ago, including extra police that were supposed to help solve the law and order crisis.

Pallas says his surpluses are there as a contingency, but also notes that some of that might be used in the next year, including if fire services are restructured.

That will be an election-year Budget that, barring any shocks to global markets and sudden interest rate hikes (which are not expected), should have the Treasurer smiling again.

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