Tuesday’s Victorian budget reported cash deficits, which capture general government spending and capital expenditure, as far as the eye can see.
As illustrated below by Justin Fabo from Antipodean Macro, “Victoria’s general government cash budget deficit is forecast to be ~1% of gross state product (GSP) in each of the next 4 years”. Whereas “the expected budget deficit for the non-financial public sector is again ~2.4% of GSP in 2026-27 and then roughly 1.5% of GSP, on average, over the following 4 years”.
As a result, Victoria’s net debt is forecast to balloon to $199 billion (24.4% of GSP) by mid-2030, whereas non-financial public sector debt is forecast to rise to $248 billion (30.4% of GSP) over the same period:
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