Thursday, 28 November 2024

Motions

Budget papers 2024–25

Debate resumed on motion of Jaclyn Symes:

That the budget papers 2024–25 be taken into consideration.

Bev McARTHUR (Western Victoria) (17:46): Rising to speak on the 2024–25 budget, it would be remiss of me not to recognise a significant milestone rapidly approaching. Next month Timeless Tim will have been our Treasurer for a full decade – 10 glorious, or perhaps inglorious years – and a week or so later he will overtake Sir Albert Dunstan to become the second-longest serving Victorian Treasurer in history. Yet despite the fact he has outlasted Dan, he still will not qualify for a statue. How unfair is that? Mind you, we are lucky still to have him. If the rumours are to be believed at least, he is forever on the verge of announcing his resignation, so often it seems suspiciously like media management. He has got Backroom Baz on speed dial.

This particular budget, the Treasurer’s 10th, was some time ago. You have all probably forgotten the background, but it is worth thinking back, because for my money the Treasurer did his best work before he even stood up in Parliament. It was not a week-long housing announcement blitz but an even longer campaign of drip-fed press commentary. There were months of Labor leaks on the state’s upcoming horror budget. You have to give the Treasurer some credit: he might not have learned to manage money in the last decade, but he can certainly manage expectations. By the time he got around to delivering his speech, which by and large lacked shocks, it seemed surprisingly like business as usual. That is certainly what he wanted us to think. The problem for Victorians is that after a long decade of budgets from this Treasurer, we know what business as usual means, and it is not a good thing.

Victorians will pay more and get less. It is shocking that we are not more shocked, but we have become numbed to it. The headline figures are bad enough. Total debt will rise consistently from $156 billion next year to $187.8 billion in 2028. The annual debt interest bill will surge accordingly from $6.5 billion at present to $9.4 billion by the end of the forward estimates. Every single week the Victorian taxpayer will part with $180 million and receive not a single cent’s worth of services or infrastructure in return. A decade of budgets from Mr Pallas has culminated in this: spending more but delivering less.

It has been more than six months since the budget now, so I have the benefit of hindsight – not that I needed it; I would hardly have had to be Mystic Bev to have predicted that since the budget Victoria’s credit rating would be confirmed as the worst in the nation. In August S&P warned Victoria was at risk of further downgrades if it pushed ahead with the Suburban Rail Loop, and in September Moody’s echoed their warning that Victoria may:

… incur a large and persistent increase in its debt burden, with the state evidencing limited capacity to implement countermeasures in the near term to preserve its debt affordability; interest payments in excess of 8.5 per cent of operating revenue on a sustained basis may be inconsistent with a rating at the current level.

This does not just mean bad headlines – it has a serious effect, even before any further downgrades. With the biggest state debt, growing public spending and productivity rising at less than one-third that of New South Wales, it is no surprise that the interest rates we pay are almost 1 per cent above the 10-year Commonwealth bond rate and higher than every other state. This is what happens when a Labor government sells out the economy to create a public sector client state.

We heard a lot about the discipline of this budget, and yet it shows the government wage bill will rise inexorably from $38 billion to $42 billion. This is what happens when Labor politicians, short-term populists, do long-term harm, indulging in vast overspending on multiple infrastructure schemes, thus increasing each project’s cost and causing mismanagement and blowouts of epic proportions. This is what happens when energy costs spiral and land and payroll taxes escalate, when employment costs rise and when regulation multiplies. As the old saying goes, if all you have is a hammer, everything looks like a nail. So it is with Labor – any problem, real or political, must be solved by government, be it through new consultation, committees, commissioners, quangos, regulation or legislation.

Last year’s budget saw state revenue reaching $99.9 billion by 2026–27, but the Treasurer has confirmed Victoria will now break the $100 billion barrier by 2025 and hit $107 billion by 2027. Labor politicians love to boast about spending, but this big growth of big government is nothing to be proud of. It is built on the backs of hardworking, enterprising Victorians, and one day those backs will break. The simple truth of this budget is that despite worse health services, longer court delays, police shortages and underfunded schools, Victorians will pay more. State revenue from taxation will rise from $32 billion last year to $45 billion in 2027–28. That is a 40 per cent rise in five years, there in black and white – staggering, unsustainable, terrifying. Nor can Labor claim this will only hit those who can afford it. The fire services levy, up from $847 million to $1.43 billion, and the municipal waste levy, up from $64 to $170 per tonne, are not discretionary spending. Every household will pay, rich or poor, and every household pays for energy too. In recent weeks I have repeatedly called out the staggering sum collected by the state government from AusNet on the land tax it owes for transmission line easements. It has risen this year by more than $50 million to $256 million. That is 5 per cent of the state’s entire land tax take, and every single cent is stuck on our electricity bills.

On a different point, and an important one, at the very heart of this budget is a bigger problem: a fiction which underpins the Treasurer’s strategy and the only way he has disguised the car crash in Victoria’s finances. Tim Pallas believes the state’s economy will grow by a quarter in four years. That is not just fanciful, it is practically fraud. Yes, the public wage bill will grow and so too will taxes, but does anyone truly believe the economically productive private sector can possibly achieve the growth his fantastic predictions require? Even with this make-believe, Labor have had to seriously massage the cash flow. The budget papers show project after project with spending reprofiled, work delayed and delivery dates blown out. The Melbourne Airport rail link is deferred four years further. The government-operated childcare program is delayed. Twenty-nine school upgrades are slowed down, as is the launch of 60 mental health centres and 10 community hospitals. The cost of one part of the Suburban Rail Loop has completely disappeared from the books – it is now ‘to be confirmed’, despite the fact contracts have already been let. Perhaps this disappearance is just as well. We all know we will be zipped around in autonomous flying cars before the SRL gets built and teleporting before it is even paid for.

Mr Pallas’s business-as-usual budget extends to his customary neglect of regional Victoria. Funding allocated for agriculture programs drops 30 per cent, and the list of infrastructure projects is seriously underwhelming. Little is new, an awful lot is delayed and some projects are even cancelled. The Geelong fast rail project still featured in last year’s budget. Now the government at least acknowledges its axing, but there is no sign of the $2 billion promised to Geelong being reallocated to other projects. It is just another broken promise. The truth is that Tim Pallas’s 10th budget is pretty uninspiring. For most treasurers that is actually high praise, but the problem is that in Victoria ‘boring business as usual’ does not mean an inoffensive, hands-off government leaving us to our own devices. Instead it means the unremarkable continuation of a decade of higher spending, higher taxes and higher debt – of the same old boasts, the same old excuses and the same inevitable course to a poorer, harder future reckoning.

Today we find ourselves reflecting on a budget that raises significant concerns for the future of Victoria. As taxpayers we are seeing a shocking increase in taxes, yet where are the improvements? Let us take a moment to examine the numbers and where the money has been spent. We have got that incredible list of 56 new or increased taxes, which I will go to in a minute, but firstly I must address the alarming situation in our healthcare system. In regional areas the outlook is particularly bleak. Hospitals like those in Colac and Melton are facing severe shortages, including the sudden closure, reopening and now basically closure again of the maternity services in Camperdown. In August this year 11 ambulances were ramped at Geelong hospital. We see waiting lists growing longer in Geelong, and specialised services in our metro hospitals are stretched to breaking point. This is a crisis that the government seems unwilling and unable to fix. Instead the budget reflects priorities that will leave many of us asking: where are our resources are being directed? Victorian taxpayers are forking out more than $22 million to fund LGBTIQA+ groups, events and organisations. This includes $14,000 for the indoctrinating and ideological rainbow toolkits. Is this the best use of taxpayer money when we have growing shortages in essential services like health care?

Let us not forget the latest round of financial mismanagement. The Metro Tunnel project has blown its budget by a staggering $837 million, pushing the total cost beyond $15 billion. This is a massive overspend, and it is the taxpayers who will foot the bill. But that is not all. The state’s new emergency call service, Triple Zero Victoria, has been handed a budget of $100,000 just to create a logo – a logo. And then there is the matter of the 2026 Commonwealth Games. The Premier, who once served as the Minister for Commonwealth Games Delivery and their legacy, made the decision to cancel the event, costing taxpayers nearly $600 million. This is indeed a legacy of the Premier and the Labor government – a legacy of waste, and the taxpayers are paying for it. Meanwhile Victoria’s debt is spiralling. By 2027–28 it is projected to hit $187.8 billion, with daily interest repayments set to reach $26 million. That is over $1 million per hour. We hear a lot about expensive and impossible projects like the Suburban Rail Loop, but when will the government actually address the fundamental issues that affect us day to day? We must demand a budget that cuts all unnecessary taxes and reflects the true needs of Victorian taxpayers. It is time we prioritised our health care, our roads and our future stability over wasteful spending, bloated projects and ideologically driven projects.

That gives me an opportunity just to go through some of these taxes: a new stamp duty on property transfers between spouses; an increased stamp duty on new cars; a new stamp duty on off-the-plan purchases; a new so-called vacant home tax; widening vacant residential land tax to uninhabitable properties; retrospective increases in insurance duty for overseas-based insurers; a new annual property valuation to increase land tax; cladding rectification tax; an environmental mitigation levy; increased luxury car tax; increased land tax for homes with contiguous lots on a separate title; increased fire services property levy; increased fire services property levy 2019–20; a new point-of-consumption gambling tax; a tripling of brown coal royalties; gold mining royalties; a new tax on Uber and taxi fares; a new corporate restructure duty; increased foreign stamp duty; increased foreign stamp duty 2016–17; introduced foreign stamp duty 2015–16; increased absentee landowner surcharge for foreign properties; increased absentee landowner surcharge for foreign properties again; increased absentee landowner for foreign properties again in 2015–16; a new city access tax for the West Gate Tunnel; a new on-dock rail charge on imported shipping containers; an increase to the municipal industrial landfill levy; a road occupation charge on construction companies; a numberplate tax; the electric vehicle tax; a new and affordable housing tax; an increased land tax on taxable holdings; increased stamp duty on property transactions; expanded point-of-consumption tax on gambling; a 10 per cent increase to Victorian government penalty units; expanded land tax on gender-exclusive clubs; mental health payroll tax surcharge; increased wagering and betting tax; and an increased fire services property levy in 2021–22. And I have only got to 39 taxes; I have got to get to 56. The last one, of course, was the probate death tax. So it was a very poor budget.

Motion agreed to.