Wednesday, 21 June 2023

Economic policy

Brad ROWSWELL (Sandringham) (14:32): Lovely and fresh, Speaker. My question is to the Treasurer. I refer the Treasurer to a statement by the Premier to this house, and I quote:

AAA credit ratings are not handed out lightly; they are not handed out to states gripped by economic mismanagement.

Can the Treasurer outline Victoria’s current credit ratings from Moody’s and Standard & Poor’s?

Danny Pearson interjected.

The SPEAKER: Order! Assistant Treasurer, the call was not to you.

Tim PALLAS (Werribee – Treasurer, Minister for Industrial Relations, Minister for Trade and Investment) (14:32): I thank the member for his question, and can I say that the Victorian government at the time that the Premier made the comment of course was one of only about three or four sovereign jurisdictions on the planet that had a AAA credit rating.

Members interjecting.

Tim PALLAS: And of course I am asked: what happened? I understand it is lonely in opposition, but perhaps the Leader of the Opposition is aware of the fact that there was a worldwide pandemic. But whilst the Leader of the Opposition was busy collecting lint from his own navel, we were looking after the wellbeing of Victorians.

Members interjecting.

The SPEAKER: Order! I ask the Leader of the Opposition once again to stop referring to members across the table by their first names.

James Newbury: On a point of order, Speaker, on relevance, the Treasurer was asked for the current credit rating, and he is yet to go anywhere near responding.

John Pesutto interjected.

The SPEAKER: Order! Leader of the Opposition, I would ask you to show some respect to the Chair. The Treasurer was being relevant.

Tim PALLAS: To answer the question quite directly and technically, our rating is much higher than the Leader of the Opposition’s.

James Newbury: On a point of order, Speaker, the Treasurer knows not to debate the question. I would ask you again to ask the Treasurer to deal with the question.

The SPEAKER: I do ask the Treasurer to come back to the question.

Tim PALLAS: Well, the question comes at a rather opportune time, because I had a wonderful discussion today with the head of Moody’s ratings agency. So I do actually happen to know the rating, and I also know what they think of the way that the government is managing the budgetary position and the challenges that every jurisdiction across the planet is dealing with. And might I say, next week I will have another discussion with Standard & Poor’s, and those discussions basically recognise that the state with a AA credit rating – not the AAA that we had previously, but certainly –

Brad Rowswell: On a point of order, Speaker, on relevance, all we want to know is the rating.

The SPEAKER: I cannot instruct the Treasurer how to answer your question. The minister was being relevant to the question that was asked.

Tim PALLAS: A AA credit rating is pretty good by international standards. Might I say, I picked up the paper only the other day to see the new Treasurer of New South Wales bemoaning the fact of the disaster of a budget that he has inherited from the Liberal Party, basically prognosticating that they are almost certain to lose their AAA credit rating. So of the states we will be, effectively, on the same rated number – AA – as every other state. I think there might be an issue with the ACT, who I think at the moment –

Daniel Andrews: They are not a state.

Tim PALLAS: They are not a state. And of course we are too busy funnelling our GST funds to the ACT. $2.8 billion of Victorian taxpayers money every year is being shifted to other states like Queensland, God bless them – $12 billion in surplus and getting subsidised by Victorian taxpayers. Let me say, if we had that $2.8 billion on our balance sheet, I am pretty confident that I could say we would have a much better credit rating going forward. But, as is always the case, it falls to the state of Victoria to protect the nation. (Time expired)

The SPEAKER: I would hope, for this last question, that members will listen to the answer rather than interjecting across the table constantly.

Brad ROWSWELL (Sandringham) (14:37): I refer the Treasurer to Moody’s assessment of Victoria’s budget, which says:

… we do not expect Victoria’s debt burden to stabilise before the end of fiscal 2028, maintaining negative pressure on the state’s rating.

Can the Treasurer explain how a budget of higher taxes and higher debt will in fact improve Victoria’s credit rating?

Tim PALLAS (Werribee – Treasurer, Minister for Industrial Relations, Minister for Trade and Investment) (14:38): It is good to see that the member actually has spent a bit of time reading our budget, as clearly Moody’s have, because it is not late-breaking news that we have not stabilised debt at the moment, but we are pretty, pretty close to it – 0.1 of 1 per cent of gross state product, as a matter of fact, in the final years of the forward estimates. So all that the member has done is read the budget paper or quote Moody’s, who have probably read the budget paper perhaps more forensically than the member himself has. What we do know as a state is that we are consistently making progress against the only jurisdiction in the nation’s pathway to demonstrate how our fiscal repair plan works. We have created over 460,000 jobs. Our economy is running 25 per cent faster than the rest of the nation. We are producing operating cash and operating surpluses in our forward estimates – (Time expired)