Libertarian Party Member of the Legislative Council (MLC) David Limbrick believes Victoria has a “huge spending problem” saying current debt levels are unsustainable.
The libertarian suggested cutting back the size of government, pausing or cancelling major projects, and slashing expenditure should be the solution, rather than raising more revenue.
On Friday, a budget update released by Victorian Treasurer Tim Pallas revealed net debt is projected to hit $135.5 billion (US$91 billion) by June 2024.
Further, by the year 2027, debt is set to reach $177.8 billion (US$119.5 billion), which is $6.4 billion (US$4.3 billion) higher than the estimate in the May state budget.
Outlining his vision to reduce the debt, Mr. Limbrick suggested the government should be cutting back spending, instead of increasing revenue through introducing a string of new taxes.
“It’s not sustainable. We’re running up debt higher and higher. And rather than figuring out how to raise more revenue, I think they should be figuring out how they can cut the expenditure because we’re clearly spending unsustainable amounts of money at the moment,” Mr. Limbrick told The Epoch Times.
“I mean, Victoria, it’s got a huge spending problem. There are limits to what they can do with taxation. And I think that they’re reaching those limits, and we’ve got a huge spending problem and we have to cut back the size of the government.”
Mr. Pallas attributed part of the higher debt to interest rate rises, claiming 13 rate rises in the the past 18 months has “presented problems for everybody.”
“The point I’m making is that there is a very substantial amount of debt the state is carrying that is also directly attributable to the movements in the cash rate,” he said.
On Dec. 12, the government revealed it had awarded a $3.6 billion contract on tunnelling for Suburban Rail Loop East.
Look for Savings
Mr. Limbrick said the Victorian government has a number of sources of revenue, including stamp duty, payroll tax, GST, and Commonwealth grants.The politician suggested the government could pause or cancel some projects to find some savings.
“I’m not convinced of the cost benefit analysis of many of these projects that they are talking about, for example, the suburban rail loop,” Mr. Limbrick said.
He also recommended asking all Victorian state government departments to find cost savings.
“I think that the government does a lot of things that it doesn’t need to do ... really wasteful things. And I think that you could order all departments to come up with cost savings. And I think our policy that we went to the last election with was a 10 percent cut in non-frontline workforce expenditure.”
Leader of the Opposition John Pesutto said the “dire state” of Victoria’s finance is worsening under Premier Jacinta Allan.
“Labor’s nine-year trend of cost blowouts, greater debt, and higher taxes is going from bad to worse under Premier Jacinta Allan,” he said.
Shadow Treasurer Brad Rowswell added that the budget update shows Labor’s record debt is still growing, in spite of new taxes on schools, rents, holidays, and visits to the GP.
“Major project cost blowouts and Labor’s continued financial mismanagement are having real consequences for Victorians, who are paying more taxes, being burdened with higher debt, and seeing critical services fall behind,” he said.
But the Labor government said Victoria’s planned and sustained recovery from the global pandemic is delivering a “strong economy and record jobs growth.”
The government noted Victoria’s gross state product lifted by 2.6 percent in 2022-2023 to be more than 8 percent higher than 2018-2019.
Further, the government said it is harnessing the COVID debt repayment plan to reduce non-productive debt created in the process of protecting Victorians in the one in 100 year crisis.
“The economy is strong, there is close to a record number of Victorians in work and our fiscal plan is on track,” Mr. Pallas said.
“Our productive infrastructure investments are growing the economy and jobs—our strategy is producing real results for Victorians.”
