PUBLIC – VICTORIA

Victorian Labor enters debt-and-tax spiral

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Original article by Lily McCaffrey, Damon Johnston
The Australian – Page: 1 & 6 : 21-May-25

S&P Global analyst Rebecca Hrvatin has responded to the Victorian government’s 2025 budget by emphasising the need for fiscal discipline, particularly in the lead-up to the state election in November 2026. The budget papers show that Victoria’s net debt is forecast to rise from about $155bn at present to $194bn in 2028-29, while the state’s annual interest bill will top $10.5bn by that date. The state’s wages bill is in turn expected to blow out to $42bn in 2028-29, despite plans to shed about 1,200 full-time equivalent public sector jobs. Meanwhile, tax revenue is expected to rise to about $48bn in 2028-29, compared with $36.8bn in 2023-24; this is despite the absence of any new taxes in the budget.

CORPORATES
S&P GLOBAL RATINGS

Victoria’s debt levies haul in far more than expected

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Original article by Patrick Durkin, Gus McCubbing
The Australian Financial Review – Page: 11 : 13-Nov-24

The Victorian government’s budget update shows that the state’s net debt is slated to top $188bn by 2027-28. The update also reveals that the government’s Covid debt levies are expected to raise $529m more over four years than had been forecast in the 2023 budget. The levy on businesses with payrolls exceeding $10m had been expected to raise $3.9bn over four years, and the levy on property investors was slated to raise $4.7bn. Meanwhile, the government’s employee expenses rose by 7.94 per cent to $15.48bn in 2023-24.

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Vic ratings warning over debt

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Original article by Gus McCubbing, Patrick Durkin
The Australian Financial Review – Page: 1 & 8 : 8-May-24

The Victorian government’s budget papers show that it expects to post an operating surplus of $1.5bn in 2025-26. However, the state’s net debt is forecast to rise from $156.2bn in mid-2025 to $187.8bn by 2028. S&P Global Ratings analyst Anthony Walker says the firm expects Victoria’s gross debt as a proportion of revenue to rise above 200 per cent of operating revenue. He warns that the state’s credit rating could be downgraded again if its debt rises to 240 per cent of operating revenue or interest payments rise to 10 per cent of operating revenue. Meanwhile, interest payments on the state’s debt will rise from $6.5bn in 2024-25 to $9.4bn by 2028, and interest as a share of revenue is forecast to rise from 6.3 per cent to 8.8 per cent.

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S&P GLOBAL RATINGS

Victorians get poorer under Labor

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Original article by John Kehoe
The Australian Financial Review – Page: 1 & 10 : 23-Nov-22

Data from the Australian Bureau of Statistics shows that Victoria’s gross household disposable income per person was $52,488 in 2021-22, which is the second-lowest among the states and territories. Victoria’s gross household disposable income per person had been ranked fourth in 1999, and reached the third-highest in the early 2000s. Former federal Treasury economist Stephen Anthony says the state government has overseen a "pyramid scheme" built on high debt; he says it is very clear that Premier Daniel Andrews has destroyed living standards and been "fiscally profligate". Victoria’s net debt is forecast to rise to $166bn in 2025-26, which equates to 24.6 per cent of the state’s economy

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AUSTRALIAN BUREAU OF STATISTICS, VICTORIA. DEPT OF PREMIER AND CABINET

Victorian budget a risk to recovery

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Original article by Rachel Baxendale, Geoff Chambers
The Australian – Page: 1 & 6 : 21-May-21

The Victorian government’s May 2021 Budget shows that the state’s net debt will blow out to $156.3bn by mid-2025. However, the government has confirmed that the state’s deficit for 2020-21 will be much lower than previously forecast, at $17.4bn. The key measure announced in the Budget is a payroll tax surcharge of 0.5 per cent on businesses with a wages bill of more than $10m; this will rise to one per cent for businesses with wages costs of more than $100m. The surcharge is slated to raise $387m in 2021-22 and about $3bn over four years, with the proceeds to be used to finance a $3.8bn mental health package. The levy has been criticised by business leaders and federal Treasurer Josh Frydenberg, who warn that it will cost jobs and undermine the national economy’s recovery from the pandemic.

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AUSTRALIA. DEPT OF THE TREASURY

$32bn debt binge funds pledges

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Original article by Rebecca Urban
The Australian – Page: 6 : 28-May-19

The Victorian Government’s May 2019 Budget has forecast a surplus of $1bn in 2019-20, rising to $1.5bn in the following financial year. State debt is projected to rise by $32.1bn over the forward estimates period, topping $54.9bn in 2022-23. The increased debt will be used to finance infrastructure projects, with expenditure on infrastructure to average $13.4bn a year over the forward estimates. Meanwhile, the government has scaled back its forecasts for growth in employment and gross state product over the next three years.

CORPORATES
VICTORIA. DEPT OF TREASURY AND FINANCE, MOODY’S INVESTORS SERVICE INCORPORATED, S&P GLOBAL RATINGS

Debt to double to $60 billion as Labor drops cap

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Original article by Patrick Durkin
The Australian Financial Review – Page: 9 : 23-Nov-18

The Victorian Government’s election costings show that the state’s debt ceiling will blow out to 12 per cent of gross state product as a result of its infrastructure spending program, which will be partially funded via debt. Treasurer Tim Pallas had previously sought to cap state debt at around $30bn, or less than six per cent of gross state product. Labor has also advised that the state’s Budget surplus for 2019-20 is projected to be $1.7bn, compared with expectations of a $2.3bn surplus in 2018-19. The Coalition intends to retain the existing debt ceiling and will seek to reduce the state’s debt by $1.1bn over four years if it wins the state election.

CORPORATES
AUSTRALIAN LABOR PARTY, LIBERAL PARTY OF VICTORIA, NATIONAL PARTY OF AUSTRALIA, VICTORIA. DEPT OF TREASURY AND FINANCE, MELBOURNE WATER CORPORATION

Surpluses stockpiled to protect state for rainy day

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Original article by Rick Wallace
The Australian – Page: 6 : 28-Apr-16

Victorian Treasurer Tim Pallas unveiled the state’s 2016 Budget on 27 April. The State Government expects to achieve Budget surpluses of $A9.3 billion over the next four years. Capital spending has been increased to $A7 billion a year. Health and education will receive capital investment funding of about $A1 billion each. The Government intends to borrow up to $A16 billion, but it aims to keep net debt below five per cent of gross state product.

CORPORATES
VICTORIA. DEPT OF TREASURY AND FINANCE, AUSTRALIAN LABOR PARTY