Victoria’s Labor government bets against the future with holy grail of budgets designed to win votes

Victorians will pay half price for public transport for the rest of the year. But in four years, their government will be carrying around $250 billion in debt.

The Labor government’s last Budget before Victorians vote in November is a cleverly crafted bet against the future. Published on Tuesday, the document delivers the holy grail of budget outcomes: more services and a big surplus.

“For the first time in seven years I am proud that I have met my commitment to the Victorian community to deliver a surplus,” Treasurer Jaclyn Symes told 7News.

There’s a cost, though, one that will be borne by Victorians for decades, if not generations to come.

State debt, which is already higher than any other state, is forecast to hit $165 billion next year. Including State organisations that are not classified as part of the Government, such as water boards and Homes Victoria, the figure is $212b.

In four years the debt is expected to reach $248b for the whole public sector.

An unanticipated $2b extra in GST revenue has gone straight to spending, rather than be used to pay off debt. Interest payments are now by far the fastest-growing government expense.

The debt trap is hidden under the headline figures. By distinguishing between infrastructure and ongoing spending, Ms Symes declared Victoria’s first post-pandemic surplus.

At $700m this year and $1b next year, Ms Symes argues the Budget’s extra spending is a fiscally responsible way to counter the effects of rising prices — even though they’re obviously election bribes in a state with a long history of overspending.

Among the benefits are a 20 per cent cut in car registration fees, free public transport until the end of May and investments in schools, hospitals, trains and the police, which is dealing with rampant juvenile crime.

The Budget maths are driven by another calculus: election polls show the Labor Party and the Liberal-National Coalition roughly even.

This week’s Budget will likely frame the entire election campaign. The Opposition has said its priority is to cut debt and taxes.

That looks difficult without pulling back some of the extra spending promised by the Labor Government, which presumably is part of its plan.

David Hayward, a former public policy professor at RMIT University, questions whether the Budget will be enough to save a government that has been in power 12 years.

“With only six months until election day, it may be a bit late to ensure an unpopular Labor government secures the additional and record fourth term it desperately craves,” he wrote on The Conversation website.

Liberals aren’t so confident. The party, wracked by internal conflict, doesn’t seem convinced it can remove a government that has dominated the state for 12 years.