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There are no new taxes or levies for the first time in several years, but the deficits are forecast to turn around through a combination of a growing economy \u2013 which is expected to expand from $609 billion to $748 billion by 2028 \u2013 and a slowdown in the major project pipeline, including no new money for the $10 billion Melbourne Airport Rail.<\/p>\n\n\n\n
There is also a slowdown in the rollout of 30 government-owned and operated early childcare centres, a delay to 29 school upgrades across the state, a delay in the rollout of 60 mental health centres and also no money for five new community hospitals previously promised.<\/p>\n\n\n\n
The government announced a 10 per cent cut to the public service last year, equal to around 3000 job losses with 1400 roles so far cut, the government said on Tuesday.<\/p>\n\n\n\n
New spending<\/h2>\n\n\n\n
But the budget still introduces $3.4 billion in new spending initiatives this year, the public sector wages bill grows from $38 billion to $42 billion and the interest on the growing debt will climb from $6.5 billion in 2024-25 to $9.37 billion by 2028. Interest as a share of revenue will rise from 6.3 per cent to 8.8 per cent over that time.<\/p>\n\n\n\n
\u201cWhat I\u2019m not going to do is oversight a budget that takes the economic momentum out of the economy. The important thing is to get that right in terms of the choices the government makes,\u201d Mr Pallas said.<\/p>\n\n\n\n
Net debt is expected to reach $156.2 billion in June 2025 and $187.8 billion by 2028. Net debt as a share of gross state product is projected to hit 24.4 per cent in June 2025, 25.1 per cent in 2026, and remain at 25.1 per cent by 2027-28. That is far higher than the peak of 16 per cent reached in the post-Cain-Kirner recession in 1993.<\/p>\n\n\n\n
\u201cTimes are tough for many Australians. Inflation is hurting. Interest rates are higher, and the cost of groceries, petrol and bills continues to rise. That\u2019s why this budget is focused, firstly, on helping families,\u201d Mr Pallas said.<\/p>\n\n\n\n
\u201cFrom help with the cost of living, to investment in education, healthcare, road and rail, we want to make life easier.<\/p>\n\n\n\n
\u201cSecondly, this is a budget focused on fiscal discipline, making sensible decisions that respond to the challenges ahead. It considers our two big problems \u2013 high inflation and workforce shortages \u2013 and how we best manage them.<\/p>\n\n\n\n
\u201cAnd thirdly, this is a budget for the future. We want our prosperous economy to stay strong. In this budget, we\u2019re making sensible choices. We\u2019re helping families. And we\u2019re building a strong future for Victoria.\u201d<\/p>\n\n\n\n
\u2018Car park operator\u2019: airport project slight<\/h2>\n\n\n\n
Mr Pallas said infrastructure investment would moderate to $15.6 billion by 2027-28, after reaching almost $25 billion this year.<\/p>\n\n\n\n
The slowdown includes no money for the $10 billion Airport Rail Link for at least four years, despite the federal government committing $5 billion to the project. Labor has blamed the delay on Melbourne Airport \u201ccontinuing to demand compensation and an underground station\u201d.<\/p>\n\n\n\n
\u201cWe\u2019re basically not in a position to have any certainty of what stage this project proceeds, largely because we\u2019ve got an airport concessionaire who chooses not to facilitate the building of the project,\u201d Mr Pallas said.<\/p>\n\n\n\n
\u201cQuite frankly, we\u2019re not paying for undergrounding to effectively line the asset base of the concessionaire. We\u2019ve had to take an assessment of how long that delays the project \u2013 nobody knows for certain, but given we can\u2019t control it, we\u2019ve taken the not unreasonable expectation it could take four years.<\/p>\n\n\n\n
\u201cOf course, were the airport concessionaire to see reason and maybe become a good corporate citizen at some point, instead of a really good car park operator, then perhaps we might be able to move those things forward.\u201d<\/p>\n\n\n\n
Banking on a rate cut<\/h2>\n\n\n\n
The government says it is counting on a rate cut this year.<\/p>\n\n\n\n
\u201cWe\u2019re hearing from economic prognosticators that we\u2019re starting to see factoring in of those lower interest rates going forward. (But) we\u2019re not sitting back praying for rain, we\u2019re recognising that we\u2019re in an event at the moment and that we have to factor in those interest rates and deal with them,\u201d Mr Pallas said.<\/p>\n\n\n\n
While the government claims fiscal responsibility, the budget includes a $400 bonus for around 700,000 students. The $287 million cash-for-kids scheme will provide one-off payments for every child at a government school and eligible concession cardholders at other schools. There is another $200 for eligible families for sporting memberships, uniforms and equipment.<\/p>\n\n\n\n
The government has also promised an extra $700 million for the state\u2019s $2.1 billion Homebuyer Fund shared equity scheme.<\/p>\n\n\n\n
AFR<\/p>\n","protected":false},"excerpt":{"rendered":"
Victorian Premier Jacinta Allan is counting on a growing economy and an interest rate cut later this year to curb the state\u2019s $26 million a […]<\/p>\n","protected":false},"author":21,"featured_media":34573,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[273,999],"tags":[472,8634,8750,8],"class_list":["post-36496","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-australia","category-australia-politics","tag-australian","tag-jacinta-allan","tag-tim-pallas","tag-victoria"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=\/wp\/v2\/posts\/36496","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=\/wp\/v2\/users\/21"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=36496"}],"version-history":[{"count":1,"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=\/wp\/v2\/posts\/36496\/revisions"}],"predecessor-version":[{"id":36498,"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=\/wp\/v2\/posts\/36496\/revisions\/36498"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=\/wp\/v2\/media\/34573"}],"wp:attachment":[{"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=36496"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=36496"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=36496"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}