On Saturday, I was interviewed by Radio 2GB’s Luke Grant. I discussed the blowout in Victoria’s debt and why it could require a federal government bailout, which would see all Australians foot the bill.
Edited Transcript:
The Victorian government is drowning in debt. It has the lowest credit rate in the country. It has the most debt. Credit rating agency S&P Global predicts that Victoria’s debt will explode over coming years.
There is principally three reasons for this debt explosion.
First, the Victorian government has borrowed heavily on massive infrastructure projects. Every one of those projects has had huge cost blowouts.
Some of them are white elephants, like the $200 billion Suburban Rail Loop. Infrastructure experts don’t want it. They say it is $200 billion down the drain. But the government has committed to building it anyway.
Second, Victoria’s public sector has grown by 59% in the last 15 years, which is against population growth of 29%. It has had the biggest blowout of public servants.
Third, Victoria’s Public Service pay bill has increased by 152% over the last 15 years, which is just insane.
Victoria has just cancelled the Commonwealth Games. We have lost $600 million for a games that nobody wanted in Victoria. It’s an absolute Mickey Mouse Affair.
The sad thing is, the federal government has just effectively bailed Victoria out by giving it $3.8 billion in additional GST, whereas New South Wales has lost $188 million, which is just insane.
So, the federal government has basically robbed New South Wales and the other states to bail out Victoria.
The scary thing is that a well respected former Federal Treasury official, Stephen Anthony, has tipped that Victoria is going to require a full-blown federal bailout because it’s debt is so bad.
So, in addition to the GST redistribution, Victoria could receive direct financial transfers from the Commonwealth.
To quote some of what Stephen Anthony said in the AFR:
“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.
Effectively, what he said is that Victoria’s budget is so wrecked that it’s going to require a federal bailout, which basically means that residents of all other states and most notably New South Wales, seeing that it is the largest, are going to potentially be required to bail out the Victorian government.
I think that is pathetic.
The Victorian government last year won an increased majority at the state election. It is an absolute joke.
When you talk to Victorians, and if you say something bad about Dan Andrews or now Jacinta Allan, many will bite your head off.
It is like Victorians have Stockholm Syndrome. It is like a cult.
I don’t understand why Victorians support this and then defend what the government does.
We got locked down for nine months through incompetence left, right and centre.
There are cost blowouts everywhere and infrastructure waste. And then you read about people dying in emergency waiting for care.
It is just an absolute basket case down here and yet the government always gets away with it and is voted back. It’s amazing.
