Federal treasurer Jim Chalmers’ big call on Victorian budget

The Treasurer has laid bare the federal government’s position on bailing out an embattled state as it struggles through its post-pandemic woes.

Treasurer Jim Chalmers has laid bare the federal government’s unwillingness to bail Victoria out of mounting debt in its upcoming budget.

Dr Chalmers offered the insight on Tuesday morning, claiming states across the country are facing similarly tough economic conditions.

“The combined pressure of increasing borrowing costs on $1 trillion of Liberal debt, combined with the costs of the NDIS, the health system, aged care, defence and in other areas is putting immense pressure on our budget,” Dr Chalmers said.

Dan Andrews’ Victorian government is reportedly in talks with Prime Minister Anthony Albanese on the need for federal help to quash Victoria’s mammoth $115 billion debt in the May budget.

The state’s financial position is partially due to its six Covid-induced lockdowns and could threaten thousands of jobs across the public sector.

Treasurer Jim Chalmers has spoken out on the upcoming federal budget. Picture: Martin Ollman / Getty Images

However, Dr Chalmers did not completely rule out aiding the embattled state battle through its post-pandemic woes.

“So what we do is we work in a cooperative and collaborative way with Victoria, and with the other states and territories as well, to make sure that we are methodically working through these challenges in our budget, (and) that we’re funding and providing the services that the people we represent need and deserve.”

Dr Chalmers went on to note each state’s needs will be addressed individually in the budget.

“We will work with the Labor states and the [Liberal] government of Tasmania to make sure that we’re doing what we can,” he said.

Victoria’s net debt is expected to balloon to more than $165 billion by the 2025-26 financial year.