A campaign spreading fear about Victorian government debt is being used to soften opposition to cuts following the November state election.
TV and social media ads funded by a group called Fix Victoria that showed the state flooded in debt began airing in August.
Amplify, a lobby group set up by multi-millionaire businessman Paul Bassat, sponsored an open letter backed by 100 CEOs and AFL figures demanding a “credible plan” to reduce debt.
The mainstream media has echoed the claims, pointing to debt levels higher than other states that currently total $160 billion.
The state built up debt during the COVID pandemic, due to the cost of sustaining lockdowns that lasted longer than anywhere in the world. But most of the debt is the result of infrastructure spending on roads, rail projects and level crossing removals.
David Hayward of RMIT University has written that, “The overwhelming proportion of Victoria’s debt has been used to accumulate assets. In 2025-26, Victoria’s assets were worth $465 billion compared to $268 billion of total liabilities.”
Much has been made of projections that the cost of repaying debt will grow to 9.4 per cent in four years’ time compared to around 7 per cent now. But this is due to higher global interest rates, not surging debt levels. In the last financial year Victoria actually ran a budget surplus of $2.4 billion.
The state is hardly facing bankruptcy. Yet higher interest payments do reduce what the government can spend on schools, hospitals and services. The answer is to tax business and the wealthy to fund spending that working class people rely on.
But debt will be used as an excuse for cuts to the public service and other programs—especially if the Liberals win the election after 12 years of Labor government. So far the Liberals have promised to reduce taxes but have avoided specific proposals for major cuts. There is already pressure from big business and the ruling class to go further.The real problem in Victoria is not debt levels but the failure to tax the rich.
