Victorian Gross State Product per person down 1.2 per cent – the second time since 2014 that the measure has gone backwards

Despite Treasurer Tim Pallas’ boast that the state’s economy is “powering ahead”, latest Australian Bureau of Statistics data paints a very different picture.

Treasurer Tim Pallas has boasted that Victoria’s economy is powering ahead despite the state’s GSP per person going backwards for just the second time in a decade.

State annual accounts data published by the Australian Bureau of Statistics on Wednesday showed Victorian Gross State Product per person was down 1.2 per cent, behind only Western Australia.

It is the first time since 2020, and only the second since Labor came to office in 2014, that the measure has gone backwards.

At the same time the state’s overall economic growth saw an increase in GSP of 1.5 per cent, behind the NT, ACT and Queensland, pushing the size of the economy to $606.1bn in 2023-24.

Treasurer Tim Pallas has boasted that Victoria’s economy is powering ahead. Picture: Aaron Francis

Business investment increased by 6.6 per cent, the second highest of any state.

Since 2020 Victoria added more than 100,000 businesses – an increase of almost 17 per cent – the largest percentage growth of any state.

“Our economy is powering ahead – we’re delivering the services and infrastructure Victorians deserve which is supporting business investment and economic growth,” Mr Pallas said.

“Our economy is growing, and this momentum means more opportunities for families, businesses and workers right across the state.”

“This year we will release our Economic Growth Statement that will confirm Victoria is open for business while we keep building the homes and infrastructure Victorians deserves.”

Mr Pallas attributed the results to the government’s commitment to infrastructure projects, the cost of which have blown out by billions of dollars in recent years.

The pending release of the government’s economic statement is set to be aimed at encouraging new business investment across the state and easing the burden on existing businesses.

Cutting bureaucratic red tape and centralising regulation and planning schemes are expected to form a key part of the statement, as is a renewed focus on manufacturing.

It is understood tax relief will not be part of the plan which is understood to feature five key pillars that underpin the growth statement including housing, deregulation and innovation.

The government’s quarterly budget update, released last week, showed debt Was growing at almost $25m day more than the government forecast in this years budget.

May’s budget forecast debt to grow from $135.8bn to $156.2bn by 2025-26 – a rate of $55.7m a day.

The current trajectory means current predictions – that debt will soar to $187.8bn by 2027-28 – could blow out by billions of dollars.

Originally published as Victorian Gross State Product per person down 1.2 per cent – the second time since 2014 that the measure has gone backwards