Symes’ budget baby steps no match for her fast spending

When Jaclyn Symes was sworn in as Victorian treasurer, she signalled the state’s finances were under new management.

To the consternation of the Community and Public Sector Union, she brought in a Baillieu-era public service chief, Helen Silver, to find ways to shrink a bloated public service.

Jaclyn Symes delivers her first budget.Credit: Eamon Gallagher

To the welcome surprise of people long concerned by the opaque methods used to account for the expenditure of public money in Victoria, she promised to have a hard look at how things were being done inside her own department.

In her plain speaking, born-in-Benalla way, Symes sounded serious about improving Victoria’s budget processes and fiscal position.

When it came to delivering her first budget, Victoria’s new treasurer reverted to type.

Gifted an unexpected GST windfall in March, she spent the lot before her budget made it to the printers. The extra $3.7 billion barely lasted two months in her hands.

Symes took over responsibility for the state’s coffers shortly after long-serving treasurer Tim Pallas handed down his final budget update last December. In the five months since then, enough extra dosh came in from federal government grants to leave the state’s sagging bottom line $2 billion better off.

Instead, the government found a way to spend all this and more, with $3.1 billion in new funding initiatives going to free public transport for kids, more beds in juvenile prisons, more money for school excursions, support for victims of family violence and farmers doing it tough.

Symes announced a small operating surplus but was unapologetic for not banking more.

Independent economist Saul Eslake was scathing about her decision to spend the state’s windfall gain.

“Jaclyn Symes has given a big middle finger to anyone who has concerns about where Victoria is financially,” he said.

Symes can rightly argue none of this money is being wasted. In her budget speech to parliament, she spoke about giving people real help to meet the rising cost of living and more funding for services on which they rely.

Yet no Victorian government has ever faced a shortage of good things to spend public money on. And even with its extra cash, this government did not see fit to revisit its earlier decision to delay its commitment to give public schools their due by fully funding the Gonski reforms.

Credit: Matt Golding

That decision, exposed by this masthead last week and confirmed by Tuesday’s budget, denied government schools $2.4 billion in state funding that they would have otherwise received over the next six years. The Australian Education Union is still furious at the government for doing this and keeping recurrent funding for state schools at a lower level than all other states and territories.

“The ‘Education State’ might be the tagline on our car number plates, but this budget puts Victorian students their families, teachers, principals and education support staff at the bottom of the pile,” the AEU Victorian Branch said in a statement issued shortly after Symes handed her budget down.

A question left unanswered by this budget is when, if ever, the government will start paying down a rising debt which, by 2028-29, will cost Victorians $10.56 billion in annual interest payments to service. That $10 billion is also money that could otherwise be spent on good things and important services.

Instead, it will go back to the banks at a rate of $27 million a day.

If you look deeper into the budget papers, there is some evidence that Symes is trying to make a break from past practices.

In the 10 years that Pallas served as treasurer, the government wage bill doubled from $18.5 billion to $37.5 billion. Over the next four years, it is forecast to rise by a modest 2.5 per cent a year.

Symes spoke at length on Tuesday about the work Silver was doing to reduce the size and cost of both the Victorian Public Service and broader public sector. She claimed that $3.3 billion in savings identified across the four years of the budget reflected, in part, Silver’s interim recommendations.

She confirmed the final report would be submitted in June and flagged a substantive rationalisation of what Victoria spends money on. “What I found compelling in Helen’s initial work was Victoria has over 500 entities and 3400 public boards and committees,” she said. “You can’t tell me that there is not some fat in there.”

Symes has also started tackling Victoria’s misuse of the Treasurer’s Advance. TAs, as they are known in treasury lingo, are a mechanism for funding urgent and unforseen expenses, such as natural disaster relief. Money is not accounted for by normal budget or cabinet processes and expenditure is justified after the fact.

In his final budget, Pallas stashed away $12.1 billion, or 12.75 per cent of the total year’s expenditure, in a contingency fund he meted out through TAs. Instead of reserving the money for urgent and unforeseen expenses, he used it to top up hospital funding and make payments on Big Build projects.

Victoria is unique among state and territory governments in using TAs in this way. Centre for Public Integrity director Gabrielle Appleby described it as a slush fund, and Symes promised to review the practice.

As a result, Symes has introduced what she described as “greater transparency and accountability for disclosure of the Treasurer’s Advance”. In Tuesday’s budget, money to be spent through TAs is broken down into separate contingencies for unforseen circumstances, funding for services and expenditure on capital works.

There is still too much money sloshing about in contingency – $9.7 billion in total – and the new reporting methods are unlikely to alleviate the concerns of integrity experts who question why expenditure on this scale remains off-book.

But in this and other areas of her first budget, Symes has at least made a start.

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