Pallas needed a bigger bucket to douse Victoria’s spending
On the day he quit politics, Tim Pallas described himself as a humble staffer who maybe got ahead of himself.
It is a self-deprecating line Pallas has used before and one that captures the good-humoured nature of a former trade union organiser and former chief of staff to a premier, whose great political talent was negotiating and facilitating the ambition of others.
Premier Jacinta Allan on Monday with Tim Pallas, who has announced his resignation as treasurer.Credit: AAP
It also hints at his essential flaw as treasurer for the past 10 years – and goes some way to explaining why he leaves Victoria as Australia’s most indebted state.
When asked to nominate his greatest regret, Pallas didn’t mention the still-soaring debt, the cost overruns on major projects or the financial pain this is causing the state and will continue to cause it years after he has retired.
Rather, it was not being able to say yes all the time to cabinet colleagues suggesting new and good ways to spend more money.
“They are great and visionary people, and sometimes the treasurer has to pour cold water over those ambitions,” he said.
Victoria needed Pallas to have a little more ego and a much bigger bucket.
When he was sworn in as Daniel Andrews’ treasurer in December 2014, the state’s net debt was $21.8 billion. According to the budget update Pallas handed down on Friday, net debt will reach $155.2 billion by the end of June and $187.3 billion in a further three years.
The pandemic swung a wrecking ball through the finances of this state and others, but Victoria’s debt was climbing dramatically before Australia’s first confirmed COVID-19 patient walked into the Monash Hospital emergency department.
Now, three years after our final lockdown was lifted, debt is still being fuelled by a government that keeps spending billions of dollars more than it raises.
Whereas a premier’s chief of staff is principally there to ensure the boss’s political plans are realised, a treasurer’s first responsibility is supposed to be to the financial health of the state.
Pallas accepts this, but where is the evidence he prioritised state finances above Labor’s big-spending electoral agenda?
In the wake of the 2018 election, when Andrews returned to power with a thumping mandate for his massive infrastructure building program including a loosely conceived Suburban Rail Loop, Victoria needed someone around the cabinet to provide a budgetary reality check.
At the height of the COVID crisis – when the instinct of all state and federal leaders was to borrow tens of billions of dollars to prevent the spread of the virus and prop up households, the economy and businesses – Victoria needed more than a facilitator; it needed someone to champion the increasingly quaint idea of fiscal restraint.
For Pallas, it is a matter a pride that he never took on this role.
“Be assured, at no stage did I ever lose sight of my responsibilities to look after the welfare of the Victorian people and never employ austerity,” he said.
A political chief of staffer knows it is their job to cop the flak when things go wrong and credit the leader when things go well.
In keeping with this political persona, Pallas offered himself as a post-retirement pinata for anyone wanting to take a swing at the government’s financial management.
“All the bad things that have come out of our budget position, they’re my responsibility and I take full responsibility for them,” he said.
“The good things – of course the premier has the leadership and vision to have got us there.”
The flipside is that, as a resolute team player – even at times when his relationships with Andrews and Jacinta Allan came under strain – Pallas cannot be solely credited or blamed for decisions taken throughout his decade in charge of Victoria’s books.
He will carry the can for the collapse in Victoria’s finances, but he shouldn’t carry it alone.
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