There was a time when state debt and budget deficits mattered. Victorians cared so much about the state’s finances in the early 1990s that it was one of the main reasons they voted in overwhelming numbers to sweep Labor from office and elect Jeff Kennett and Alan Stockdale to get the books in shape.
A generation on – and after an era when households loaded up their own debt thanks to historic low interest rates – how important will debt and deficit be in swinging votes?
Daniel Andrews and Matthew Guy have made it pretty clear with their free-spending ways what they believe the answer is: not much.
Under Andrews, state debt will reach $165bn by 2025, more than the combined debt burden of NSW, Queensland and Tasmania. His budget deficit has topped $10bn.
Emergency – and necessary – pandemic spending is only partly to blame. The debt bomb has also been primed by cost overruns on every major road and tunnel the government has erected or dug.
Throw in a ballooning public sector wages bill, baked into the books for decades to come, and Victoria’s financial future looks rocky.
The Opposition Leader has run hard on the spiralling state debt for months, but his Stockers-esque rhetoric begins to look thin when you consider he’s committed to a bigger election spend than Labor.
In Tuesday’s debate, Andrews accused Guy of splurging $30bn to Labor’s $11bn in election promises.
It’s significant that Guy didn’t deny this number.
Andrews has been fudging the true cost of his Suburban Rail Loop for months and as late as this week was brushing off demands to provide hard numbers around what it would cost.
Meanwhile, opposition Treasury spokesman David Davis ducked and dodged on Thursday when asked what the opposition’s election promises bill came to.
Treasurer Tim Pallas and Davis talked up big “financially responsible” games on Thursday but the fine print of their strategies revealed both sides were paying lip service to the state’s finances.
Their plans are largely bankrolled on raiding emergency, contingency or future funds rather than genuine reforms to reduce costs and deliver economic growth.
And this does not add up.
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