Wednesday, 7 February 2024

Statements on parliamentary committee reports

Public Accounts and Estimates Committee

Report on the 2023–24 Budget Estimates

Jess WILSON (Kew) (10:08): I am pleased to make a further contribution on the Public Accounts and Estimates Committee (PAEC) Report on the 2023–24 Budget Estimates tabled on 3 October last year. Previously in this chamber I have made some observations around that report and its recommendations relating to my portfolio of education and early childhood, but today I would like to take the opportunity to highlight some of the findings in relation to my portfolio of finance.

The committee noted in the report the $2.9 billion in saving initiatives contained in the budget over the forward estimates. These savings measures include a forecast reduction in spending on consultancy and labour hire, a reduction in back-office and corporate functions and a range of savings and efficiencies across government. The report states the committee asked departments to identify these savings and efficiencies and how they would meet their savings targets. A number of departments advised they would be providing further details to government on the implementation of these savings at a later stage, and as the committee report rightly notes, the savings measures contained in the budget amounting to $2.9 billion are there without any detailed explanation.

Let us start with the promised reduction in consultants and contractors. Unsurprisingly the Labor government does not have a good track record in this space. In fact the Victorian Auditor-General found last year that the Allan government spent nearly $12 billion on contractors and consultants over four years, breaking its election promise to cut waste. And despite promising to reduce spending, Labor has spent over $11.6 billion between 2018–19 and 2021–22 on consultants and contractors. Since coming to government in 2014 Labor has spent a total of $24.4 billion on consultants, contractors and labour hire. That is an increase of a staggering 47 per cent between 2018 and 2022, according to the Auditor-General’s report. Concerningly, only two departments actually reduced spending and one met the 50 per cent reduction target, while several departments, the Auditor-General found, did not even meet their reporting requirements around transparency. This is Labor’s financial mismanagement on another scale, and once again they are trying to hide it.

On top of this dramatic increase in consultants, we also look to the growth of the public sector. Looking at the PAEC report, the lack of detailed explanation in the budget on exactly how these savings measures are going to be achieved is a cause for very significant concern. Even if the government meet their savings targets, which they appear to have come up with on the back of an envelope, Victoria is still on track to hit net debt of $171 billion by 2026–27. As the Shadow Treasurer has just said, that is $15 million of interest payments a day we are making at the moment, climbing to $24 million a day within just three years.

ABS statistics show the public sector in Victoria has grown by over 60 per cent over the past 15 years, which is double the rate of population growth across the same period, and it is significantly higher than other states. According to the S&P Global Ratings, Victoria’s wages bill has risen steadily since Labor came to power in 2014, jumping by 65 per cent between 2015 and 2023. But the scale and the speed at which the government has bulked up the bureaucracy is truly remarkable. You can understand there would be some growth, but when you look at the detail you understand it is not the frontline workers that are increasing under this government. If you look at some of the numbers, the growth of bureaucrats earning more than $250,000 has increased by 56 per cent since 2019, and there has been a 142 per cent increase in bureaucrats earning over $350,000 since 2019, a doubling of bureaucrats earning over $450,000 since 2019 and a tripling of bureaucrats earning more than $500,000 since 2019. The growth of the public service is coming at the expense of services because it is not being delivered through frontline workers.

And finally, just looking at the savings purported in the budget and looking across where there have been blowouts across this state, looking at major projects, I turn to my own electorate of Kew, which is going to be affected by the North East Link. This was a project promised by the government for $5 billion, revised up to $10 billion, revised again to $18 billion, and then at the end of last year the Premier went out and announced it will now be $26 billion of taxpayer money. That is a project that has blown out by $21 billion and is costing Victorians every single day.