This is Tim Pallas’s lipstick on a pig budget.
The Victorian economy is clearly recovering but the budget bottom line, battered as it has been by the pandemic, remains terrible.
It is weighed down by still soaring debt, surging public service wages and major projects overruns.
The trade-off is that the finances are propped up by galloping taxes, which are a hand brake on growth and employment.
No amount of political lipstick can change these fundamentals.
Pallas is unapologetic about his vision for more jobs and a social dividend through a sharply improved mental health system.
Few could argue against the ambition of better mental health.
It’s how you get there that will be the point of contention.
A better run major projects agenda, for example, would have taken pressure off the budget.
As always, the budget is a heavily political document.
The 6.5 per cent leap in Gross State Product this financial year and modest improvements in debt levels compared with November do not extinguish the long-term challenges facing the state.
As unpopular as some of the tax rises will be, they have been targeted at Labor’s traditional opponents; read big business and property high rollers.
It is a shame, and a defining shortcoming, that Tim Pallas and the Cabinet cannot find a way to embrace a greater bias towards entrepreneurialism and business.
In many ways, it’s the missing link in the government’s long term ambitions, with strategists having decided that its continued hold on government is to rule decidedly from the economic and socially-oriented Left.
The mental health tax on big business will almost certainly cause jobs pain in the biggest businesses and targeting the property sector was really further evidence of Treasury’s desire to pick the low hanging fruit from the revenue tree.
This makes it cheap and easy politics, more than 18 months out from a state election.
Labor thinks it has the politics right on this budget.
But the political cost might well lie at Anthony Albanese’s front door.
Pallas is adamant that, when you cast aside the impact of the pandemic, Victoria has been an engine room of the national economy.
While Victoria remains a Labor stronghold federally and at a state level, the heavy spending, big taxing budget will add a considerable micro opportunity for the federal Liberal Party.
First because of the policy failures that led to the second wave in Australia, killing more than 800 Victorians.
Now the Liberal Party will be able to add the new taxes to their electioneering strategy at the next federal election, quite possibly to be held before the end of this year.
Scott Morrison has already zeroed in on Victorian Labor’s higher taxes agenda and there is no doubt Liberal strategists will be very keen to hammer Albanese on the second wave that occurred under Victorian Labor’s watch.
The deepest Liberal fear in Victoria is that Labor goes unpunished for the carnage that was the second wave.
