Victoria, Australia’s most indebted state, is projected to have $247.2 billion of debt by 2027, up from $55.2 billion in 2019:
The state’s poor budgetary position is attributed to wasteful “Big Build” infrastructure projects, such as the North-East Link and the Suburban Rail Loop, alongside excessive spending on bureaucrats.
Victoria’s public sector has grown by 59% in the last 15 years, easily exceeding population growth:
Source: The AFR
Victoria’s public service pay bill increased by 152% over the same 15 year period, the nation’s largest increase:
Source: The AFR
The state government also spent $589 million on the cancelled Commonwealth Games without any benefit.
Former federal Treasury official Stephen Anthony has warned that heavily indebted Victoria could require a federal “bailout”.
“Victoria is on a suicide mission to record borrowing, just as global interest rates are about to hit 5%”, Anthony said.
“Potholes can’t get filled, emergency departments can’t afford clean linen, primary schools can’t fix heaters”.
“Things are about to get very ugly”, he said.
Victorians are bracing for higher taxes, levies, and charges in the upcoming state budget to pay off the state government’s debt, as well as cuts to key services.
The rest of Australia has already been called upon to bail out Victoria, whose incompetence has been rewarded with a large increase in its GST allocation for 2024-25:
Soon, the rest of Australia will be made to stump up more funds to pay for the Victorian government’s waste and inefficiency.
