Such is the style of the modern government, the simplest way to return to balance is to raise more money via taxes; rather than pull the other lever, which introduces restraint and spending in a more fiscally responsible manner. We note that the Victorian Government remains committed to re-establishing the State Electricity Commission of Victoria for over $1 billion (and presumably instrumentality debt on-top). As the financial managers of the country’s most indebted state, the Andrews Government is introducing a number of measures under its decade-long “fiscal repair plan” that seeks to payback the significant so-called $31.5 billion of Covid-debt. The rating agencies will be appeased by budget repair (if albeit through higher indirect taxes rather than a meaningful reduction in structural spending). So too will the broader community, but significant elements will not.
Even despite these measures (discussed in more detail below), net debt is still expected to balloon from $117 billion this financial year to $171.4 billion by 2026-27 with the interest bill for Victorians at $5.2 billion in 2023-24, rising to $8 billion by 2026-27. It will be big business, property investors, private schools and public sector workers most affected by the new measures; big business and property investors in particular have been targeted by the Government as "those most able to pay”.
Key announcements from the Budget include: