Late last week, The AFR reported that Victoria’s state government debt has blown out by another $11.7 billion to more than $126 billion.
Global ratings agency S&P also warned that Victoria is on track to almost double its debt by 2027 to $247.2 billion.
This means that Victoria’s interest bill could exceed $33 million per day, more than doubling NSW’s debt, which is projected to reach $118 billion by 2025-26.
“On our measures, interest costs will soon consume more than 5% of operating revenue for the mainland eastern states”, the S&P report said.
“Interest expenses topped $14.3 billion in fiscal 2023 … deficit states will borrow merely to meet interest outlays, creating a vicious feedback loop”.
Never fear Victorians, because your state will gain the most from the annual distribution of goods and services tax (GST) revenue.
The Commonwealth Grants Commission has advised that Victoria will be allocated $23.7 billion of GST revenue in 2024-25, an increase of $3.8 billion.
By contrast, the nation’s largest state of NSW will see its GST allocation shrink by $188 million:
NSW Treasurer Daniel Mookhey is rightly angry, describing the allocation as “absurd”.
“It is a serious setback on the state’s return to surplus”, he said.
By contrast, Victorian Premier Jacinta Allan is chuffed, stating that she was pleased to see the grants commission had given her state a “much fairer share” of the GST.
“But … there is still more work to be done when it comes to GST”, she said.
Now watch on as Victoria’s financial mismanagement and skyrocketing debt are nationalised.
Soon, it will be every Australian’s problem.
