Victorian Labor prepares savage budget cuts

The Victorian Labor government, which claims to be the most progressive in Australia, is laying the ground for a horror state budget on 23 May.

Premier Daniel Andrews has warned there would be “very difficult measures” and has instructed senior public servants to plan for a 10 per cent cut to their budgets without harming frontline services.

The Community and Public Sector Union says this could mean 6000 job cuts and hit out at the idea that only frontline roles matter.

State secretary Karen Batt said: “It means government will exempt every politically sensitive area but they’ll impose the cut in the support roles, which wipes out the service delivery anyway as more so-called ‘frontliners’ spend more time doing those support roles.”

The government says it will lift the public sector pay rise cap to 3 per cent a year—but this is still far below inflation and the same level imposed by former NSW Liberal Premier Dominic Perrottet.

Peter Marshall, secretary of the United Firefighters Union’s Victorian branch has labelled it “a disgrace”. Teachers in Victoria are already locked in to pay increases of just 2 per cent a year until 2025.

The government is also coming for injured workers, with cuts to the state’s WorkCover scheme on the cards.

And 45 community health services have been told to expect cuts of up to 15 per cent, mostly targeting preventive and education programs around vaping and obesity.

Labor is indicating that it will drop or push back major infrastructure projects, threatening future construction and manufacturing jobs.

The building of a train line to the airport will be postponed and the Melbourne to Geelong fast train project is likely to be axed—making it unlikely that projects to improve rail in the western suburbs will happen in the foreseeable future.

Interest payments

Like governments all around the world, Victoria borrowed and spent huge sums to get through the pandemic and the lockdown.

Victoria’s net debt is forecast to surge to $166 billion by 2025-26—the equivalent of 26.5 per cent of gross state product.

Interest payments on the debt are forecast to hit $7.5 billion in 2025-26, up from $3.9 billion in 2022-23. Meanwhile, revenue from GST and property stamp duties is forecast to fall.

Labor is desperate to show the banks and the bosses that it is “responsible” and is drumming up panic to justify its cuts. Yet its own budget update handed down last November showed the state heading back to a $870 million surplus by 2025-26.

There’s money for Labor’s pet projects, like the 2026 Commonwealth Games, expected to cost up to $2.6 billion.

Meanwhile basic services are limping by and the proposed cuts will make things worse.

On things that matter—like housing—the Andrews agenda is already falling short. Under Labor, homelessness has skyrocketed, from 35 people per 10,000 population in 2006 to 47 people per 10,000 population in 2021.

The state government has built more than 1700 new social housing homes with another 7381 on the way. But more than 100,000 Victorians are on the waitlist for housing and the state needs 60,000 new social housing properties over the next 10 years.

Gorge at the trough

Yet there will be no sacrifice for police and prisons, which have gorged at Labor’s trough in recent years.

Andrews became premier in 2014. By 2019, state spending on education had increased by 30 per cent, on health by 45 per cent, on police by 60 per cent and on prisons by a whopping 96 per cent.

Victoria has more police than NSW and substantially more per 100,000 people. Victoria spends about the same on policing even though NSW has 1.4 million more people.

According to The Age, the state’s prison population almost doubled in the decade to 2019 and the annual cost of housing and supervising inmates more than tripled. The government expects the annual cost of running prisons to double to more than $4 billion by 2030.

The growth in prisoner numbers is greater for women than men, for First Nations people it’s greater still, and for Indigenous women it’s greater again.

Meanwhile the Federation of Community Legal Centres is warning that the chance of justice for the worst-off is shrinking, with its centres cutting staff and services because state government funding this year is between zero and 2 per cent—compared to 5 per cent in NSW and 5.07 per cent in Queensland.

Labor sees the upcoming budget as a way of proving its financial responsibility. Workers and their unions on the other hand must refuse to carry the can for the budget deficit.

We need to fight for greater investment in government services to meet people’s needs, not cuts and sackings.

By David Glanz


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