Premier, there’s no such thing as a free train ride

Premier Jacinta Allan, makes an announcement about free public transport for children. Picture: NewsWire/Valeriu Campan

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The word “free” should be banned from budgets, particularly in Victoria.

Jacinta Allan is the latest leader – they all do it, on both sides of politics – to throw the
f-word around when she announced on Sunday a $318m youth myki that will allow children to ride for free on all metropolitan and regional trains, trams and buses for the next four years.

It’ll cost taxpayers about $80m a year.

It’s being sold as a cost-of-living measure and it’s true that this will save some Victorians some money.

This was where the debate started and ended on Sunday in assessing the policy.

But there is nothing free about Allan’s “free” train rides. They come at a cost to the budget and that is something all Victorians must pay for.

In fact, even children who will now enjoy a “free” ride will be on the hook to pay for this lazy hand-out when they grow up, get jobs, and start paying taxes, a large chunk of which will go towards servicing higher debt courtesy of this type of profligacy.

When governments run small budget surpluses (as is expected to be announced on Tuesday) or run budget deficits against a backdrop of high debt levels, promises such as the $318m youth myki still adds up, one way or another, to increased debt.

Every dollar of the 2025-26 surplus should be used to pay down existing debt, forecast to soar close to $200bn by 2028, and reduce the interest bill crippling the state’s economy and driving up taxes.

Allan has more problems coming down the line too, dwarfing the issue about blowing $318m on “free” trains. Global financial markets are placing budgets under the microscope and are losing patience with debt-laden government’s showing no fiscal discipline.

S&P Global has already signalled that it may downgrade Victoria’s credit rating further, sending the state’s interest bill soaring. Debt is also well and truly entering a more expensive cycle and billions of dollars in cheap Covid-era of loans Victoria took out are due to be refinanced in a few years. It’s a safe bet this “refi” will come with a higher interest rate. Again, all Victorians will have to pay for this. Eventually, even those kids riding “free” trains.