Victorian election 2022: Labor pledges $1bn surplus by 2026

Wearing hardhats and hardhats, Prime Minister Daniel Andrews and Deputy Prime Minister Jacinta Allan toured the Tube tunnel at the future Arden station to spout Labour’s Big Build project.

Leasing two of Melbourne’s largest sewage treatment plants would raise $6.7 billion over four years under the coalition’s plan, budgeted by the Parliamentary Budget Office.

Proceeds would be transferred to the Future Fund, which would draw $10.2 billion between 2024 and 2025.

Hayward said it would end up costing Victorians money through their water bills.

“It’s essentially shifting money from one side of the Victorian public sector to the other, and the cost will have to be borne by people with water bills,” Hayward said.

Davis couldn’t say how much revenue would be lost by cutting the Future Fund or how much the state would save on interest, but he believed it would have a net benefit.

“We think it will be a positive move on balance,” Davis said. “We think it is right to reduce the national debt.

“We see that not only will this mean lower interest rates, but it will also mean that the state will not be in a position going forward where a future government can loot that and misuse the money.”

The coalition also said it would find $5.1 billion above forward estimates by eliminating waste. Davis said this did not mean job losses in the public sector.

At 6:30 p.m. on Thursday, the opposition made it clear that it would save, withdraw and reprioritise $38 billion while spending $28 billion on new pledges over the next four years.

The deficit under a Guy government would be larger than under Labor next year, but net debt would be $10.4 billion lower in 2025-26. According to the documents, the surplus would have been larger a year earlier.

In a final pitch to voters, Pallas stated that all Labor campaign announcements had been fully funded, “giving a huge boost to the economy without privatisation, net debt increase or new tax introduction”.

“Because all our investments are more than fully funded, the surplus will now exceed $1 billion in 2025-26,” Pallas said. “That’s a $11 billion turnaround in just three years.”

The government also hopes to recoup more than $3 billion in savings, including $200 million from a crackdown on the state bureaucracy’s use of labor and consultants.

Hayward said those offsets could also be called cuts, which he said Pallas failed to fully explain on Thursday.

Labour’s platform was independently audited by the treasury, while the coalition used the parliamentary budget office, meaning the documents cannot be easily compared.

Both sides have spent the campaign wrestling for the economic high ground, while the opposition has yet to release its policy cost document.

The tally of Labor pledges shows it announced 89 spending and austerity initiatives during the campaign, totaling $3.27 billion over the next five years. After factoring in the new spending announced since the pre-election budget update released at the start of the campaign, Labor estimates the state is on track to post a $10.2 billion deficit this financial year .

But it predicts the state’s precarious financial position will soon improve as the economy continues to accelerate out of the COVID-induced slump, with a $3.6 billion shortfall expected for 2023-2024 and a relatively small deficit of $534 million thereafter the year after.

Labor believes the state’s financial fortunes will have completely turned around by 2025-2026, with a surplus of just over $1 billion.

If delivered, it would enable the start to finally begin paying off Victoria’s colossal national debt, which is expected to reach about $166 billion by June 2026, equivalent to about a quarter of the total value of the state’s economy.

But a count showed that the budget would, in fact, have remained in deficit had it not been for a “drawdown” of $1.1 billion drawn from “output contingencies.”

In keeping with one of the main themes of the campaign, the announcements were by far the biggest spend in health. Labor announced $619.9 billion in current health spending and more than $4 billion for new and improved hospitals.

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Labor budget documents showed Labor plans to recover $3 billion by deferring payments to a fund set up to meet the state’s massive unfunded pension obligations that arose in the 1990s.

The cost document showed that much of the capital expenditure, particularly on hospitals, has not been allocated to particular years, and that a significant portion is likely to be budgeted only after the next term.

Davis jumped on the lack of $4 billion in health and hospital pledges that Labor failed to submit in their forward estimates.

“This means that either these hospitals will not be built — or even started — in the next four years, or net debt under Labor will be significantly higher than the current $165.9 billion expected,” he said.

Davis described Labour’s financial statement as “a lemon”.

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