Allan government under fire for delaying release of state budget

The Allan government will delay handing down this year’s expected “horror” state budget until after the federal election, sparking fierce criticism from the state opposition.

The Allan government will delay handing down this year’s state budget until after the pending federal election.

The budget was set to be delivered on May 6, but will now be delayed by two weeks sparking fierce criticism from the state opposition.

“With a federal election due to be held in the first half of 2025, we will finalise our budget after we know the outcome,” a government spokesperson said.

“The federal election must be held on or before 17 May 2025.

“As a result, the Victorian budget 2025/26 will now be delivered on May 20.”

The move has prompted speculation the federal election could now be held in May.

It was widely tipped Prime Minister Anthony Albanese would call an April election to ensure it was held before what is expected to be another horror Victorian budget.

Australian Prime Minister Anthony Albanese and Victorian Premier Jacinta Allan during a visit to Boronia Heights Primary this week. Picture: David Geraghty

Senior government sources said ministers were bracing for a difficult budget in which there would be little to no new spending.

Victoria is currently on track to reach a record debt level of $188bn by 2028.

However it is expected that figure could blow out significantly in this year’s budget with serious question marks over the government’s spending assumptions.

The government’s mid-year budget update, released in December, showed the state’s deficit had ballooned by $1.4bn from an expected $2.2bn to $3.6bn this financial year.

It showed Victoria was accruing debt faster than anticipated which the government blamed on infrastructure investment.

Victoria is on track to reach record debt. Picture: David Crosling

Victoria has been publicly put on notice by major credit ratings agencies that it could face a damning credit downgrade if its fiscal position worsens.

Of most concern is the prospect that the government persists with its $34.5bn Suburban Rail Loop project without securing much needed Commonwealth funding.

A credit downgrade would put Victoria at an historical low rating, increase interest rates on newly-issued bonds, and add to the cost of servicing Victoria’s debt.

Former treasurer Tim Pallas, who resigned just weeks after the update was released, consistently refused to rule out new taxes to curb the debt trajectory.

However he said the government would not entertain the idea of introducing a debt levy.

Shadow treasurer, James Newbury, accused the government of stalling tactics because it was politically convenient.

“The state finances are obviously so diabolical that Jacinta Allan needs more time to work out how to spin and lie such a bad set of figures,” he said.

“The next budget is clearly going to be another high taxing, catastrophe, of a budget”.

Originally published as Allan government under fire for delaying release of state budget