Dan Andrews sentences Victorians to debt slavery
Victorians are drowning in debt thanks to the Andrews Government’s wasteful spending.
Victoria already has the nation’s largest debt pile, as illustrated below:
Victoria has the nation’s largest state debt (Source: Alex Joiner).
This $116 billion of debt has been driven by the state government’s decision to “embark on very big, largely debt-funded infrastructure spending programs”, according to independent economist Saul Eslake:
“All of those projects have suffered from cost overruns, as big projects almost inevitably do”, Eslake said in May.
This spending has drawn the ire of the state’s Auditor-General, which has issued multiple reports scorning the government over its infrastructure waste (e.g. here and here).
Victoria already has the nation’s lowest credit rating, and there are fears its will be downgraded further with Moody’s ratings tipping the state’s debt will balloon to $226 billion by 2026.
Moody’s, one of the world’s “big three” credit rating firms, predicted the staggering sum in Victoria’s most recent credit report.
As it examines the “whole of government”, the total debt projection is $55 billion higher than the $171 billion net debt number anticipated in the May state budget.
It would result in an 85% increase in overall debt in just five years, from $122 billion in 2022.
Other government institutions, such as water corporations, the Victorian Managed Insurance Authority, and the Transport Accident Commission, are not included in the government figure’s sector-wide gross borrowings and debt loads.
“We look at the whole of government, we don’t just look at the general government”, Moody’s lead analyst John Manning said.
“Quite often there could be operating deficits sitting through the non-financial public sector which aren’t included in the general government”.
“They need to be funded.”
Moody’s warned that Victoria’s credit profile has deteriorated in recent years and that it would continue to do so because of continued infrastructure investment, which would increase debts.
“Despite the underlying strength of the Victorian and broader Australian economy, the state’s debt burden is unlikely to stabilise before the end of the fiscal year ending in June 2028”, Moody’s said.
“This rapid (and prolonged) growth in debt amid higher interest rates will raise borrowing costs and weaken debt affordability over time, limiting headroom under current rating tolerances”.
The Victorian Government announced cuts in infrastructure projects and public servant jobs to stem the bleeding.
Meanwhile, living standards will worsen as the state’s population continues to balloon at an alarming rate.
The 2023 federal budget projected that Victoria will again lead the nation in population growth, swelling by an astounding 694,000 over the five years to 2026-27:
Source: 2023 federal budget
This means that Victoria’s population will grow by 1.5 Canberra’s in just five years, but obviously without the required additional investment in infrastructure and social services.
Still, Premier Dan Andrews has actively lobbied the federal government for more immigration and population growth into Victoria, which would mean even worse shortages of housing, infrastructure and services.
The way it stands, Victorians are facing a more congested future drowning in a sea of state debt.
