Wednesday, 6 March 2024

Statements on tabled papers and petitions

Department of Treasury and Finance

Budget papers 2023–24

David DAVIS (Southern Metropolitan) (16:21): I want to draw the chamber’s attention to the Standard & Poor’s report that was released last Friday. What that report shows is a massive surge in state debt, a state debt that is spiralling out of control. That state debt, according to Standard & Poor’s, is heading for $250 billion. That is money that is going to have to be paid back by Victorian families and Victorian businesses, by our children and by our grandchildren. This is a huge amount of money, and it is money that is seriously crimping the ability of state to do the work that is required.

A large part of that debt that is there now has been put in place by the Andrews Labor government and now the Allan Labor government. A decision was made ahead of the state election in 2018 to allow a surge in state debt, a deliberate plan announced by the Premier and the Treasurer in the lead up to the 2018 state election to double the amount of state debt held by Victoria as a share of gross state product. They did that, it surged off and the large number of major projects that were already running and then were further put into the system led to a massive surge in the amount of money the state was borrowing for these projects. Further, those projects –

Ryan Batchelor: On a point of order, Acting President, I am just wondering which tabled report the member is speaking to and the date tabled.

David DAVIS: I am speaking to the budget. What is very clear is the huge spending by this state government on major projects, which has been largely uncontrolled. There is more than $40 billion in cost overruns that have not been properly constrained, blowouts in projects of more than $40 billion. It is now at the point where Victoria’s debt is so great that in the short period ahead it will be greater than New South Wales, Queensland and Tasmania combined. This is back to the days of the Cain–Kirner governments and worse. It is back to the days of the Cain–Kirner governments, where state governments thought they could run an independent policy and just surge forward with more and more borrowing and more and more debt, not concerned at all about the quality of that debt, not concerned about how that debt was applied and not concerned about the return on that debt.

We see it with the Suburban Rail Loop, as the biggest project in Australia’s history, a project that has not been properly scoped and a project that does not have a proper arrangement in terms of a business case. It does not have proper, clear cost controls on the way the project is being run. Already the Auditor-General has pointed out that the cost of the first stage has increased from around $35 billion to $41 billion, and that is only the start. The Parliamentary Budget Office costed the first two stages at $125 billion, a massive capital hit on the system. That $125 billion is very different of course from the $50 billion that the state government went to the 2018 election with. They said in 2018 they were going to build three stages of the Suburban Rail Loop for $50 billion. No-one serious believed that that could happen. But the state government was not challenged on that by the media sufficiently, and the state government got away with the claim that it would be $50 billion.

Now we know on their own figures the first stage will be $35 billion, but actually the auditors say it will be $41 billion. The Parliamentary Budget Office say that the first two stages will be more than $125 billion. You have got to ask how they are going to fund that. Let me just say something here. The state government has $11.5 billion or just a bit over $11 billion in their own money and $2.2 billion of Commonwealth money. That is all the money they have in the kitty at the moment to fund a project that is far and away the biggest project in the state’s history. They are going to do it by taxes, they are going to do it by levies, they going to do it by value capture and they are going to have to backfill. They said at first they were going to do a third state, a third federal and a third value capture. That federal money is now not there, so it is all going to have to come out of the value capture or new taxes and charges – or new borrowings perhaps is what the state government might intend.

You have got to ask how that is going to benefit the community. I live in those areas and represent the areas where some of the Suburban Rail Loop stations are, and they have not properly engaged with the community. The community does not know about these costs. The community is going to pay through the nose through these value capture projects, value capture – (Time expired)