COVID-19 the Scapegoat for Andrews’ $171 Billion Debt

Victorian Premier Daniel Andrews speaks to media at the Parliament of Victoria in Melbourne, Australia, on May 18, 2023. AAP Image/Joel Carrett

Commentary

Victorians will be paying for the financial mismanagement of the Daniel Andrews government for at least the next decade.

This week’s state budget revealed the massive cost of the government’s failings for families, workers, and businesses.

Worse, the government had revealed no credible plan to bring the vast debt under control.

Victoria’s net debt will balloon out to $171 billion (US$113 billion), that is 171,000 million dollars, by 2026.

This is more than three times the amount forecast in the 2019-20 state budget and is more than the combined debt of east coast neighbours New South Wales, Queensland, and Tasmania.

It also adds up to $25,000 for every person in the state. For a family of four, the net debt will be more than $100,000.

The interest bill on this debt is some $10 million per day. This will rise to $22 million per day by 2026-27.

In other words, the state could build a new school every week for the amount of interest being paid, or it could build a new hospital with three months’ worth of interest payments.

Premier Andrews claims that the dire situation is a consequence of dealing with COVID-19. Yet most of the debt accrued since 2019-20 is unrelated to COVID.

The Labor government inherited a debt of just $22 billion when it was first elected in 2014. It claims that COVID has added $30 billion to the debt.

But the massive borrowings—and consequent debt—are for other government expenditures.

People cross a quiet Flinders Street in Melbourne on Sept. 1, 2021. Daniel Pockett/Getty Images

Victorians are now paying twice.

First, for the most expensive and longest COVID lockdowns in the world, which have proven unnecessary and a failure, resulting in the highest death rates of any jurisdiction in the country.

Second, Victorians will have to pay for the government’s additional borrowings.

Worse, the state has no plans to reduce its borrowings in the coming years! Debt will grow from $135 billion in 2023-24 to $171 billion in 2026.

Where to for Victoria?

How can Victorians trust the promise that borrowings will be reduced in the future?

Not only are Victorians being slugged with higher interest payments on the debt, but services are also being reduced and taxes raised.

These will hit middle-income earners in particular and will flow to ordinary Victorians.

Consider the impact of various measures.

Two new levies on business and property investments will be passed on to others, including renters and workers in the form of higher costs.

Increased payroll taxes affect the cost of doing business, impacting prices and employment. The state’s unemployment rate is forecast to increase in the coming years.

The state’s growth is forecast to fall from 2.75 percent this year to just 1.5 percent in 2023-24.

New property taxes will compound the existing housing shortage and drive-up rental prices as migration continues to rise.

Even the state’s burdened health system faces cuts following a $2 billion cut last year. According to Shadow Treasurer Brad Rowswell, another $1 billion is being cut to a system that is struggling with growing hospital waiting lists and long queues for ambulances.

Victoria Ambulances are seen at the St. Vincent Hospital in Melbourne, Australia, on Jan. 11, 2022. Diego Fedele/Getty Images

Tens of thousands of parents who sacrifice to send their children to independent schools will also be hit by the abolition of payroll tax exemptions on more than 100 schools.

The tragedy for Victoria is that the premier will not take responsibility for his failings—it will be the fault of COVID-19 and the Reserve Bank of Australia for raising interest rates.

But these factors didn’t lead to financial disaster in other states ... after nine years in government, the premier is clearly responsible for this mess.

Andrews presides over a government that will not exploit the vast natural resources it has, shutting down important sources of revenue.

Despite his claims, the next generation of Victorians will pay for the financial prolificacy of the current government and the burden will be felt for more than a decade.

Victoria’s tragedy is compounded by an ineffectual opposition more intent, to date, on internal warfare than fighting for the well-being and prosperity of the people.

It is a double tragedy for the state.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.