If the Coalition truly intends to fix the mess, it’s incumbent on them to come clean with the people of Victoria as to how they’re going to do it.
Higher taxes won’t save the state – it already taxes more than almost anywhere else. Fixes must start with cutting $7 billion in excess spending.
The next Victorian government – whatever its political complexion – won’t be able to pay down much of the debt it will inherit by selling off assets.
Little in the budget update will reassure rating agencies the Allan government is prepared to do what needs to be done to alleviate Victoria’s financial woes.
The unfortunate reality is that neither party has any kind of mandate to do what needs to be done to put the state’s finances on more sustainable footing.
Ratings agencies assume the federal government stands behind the states’ debts, so if Victoria is downgraded because of its ballooning debt that has national implications.
Now that Labor has achieved a swing towards it – for the first time in Australia’s history – it should, ideally, act like a first-term government.
The next federal government should be thinking about ways to get control of the financially imprudent behaviour of the state and territory governments.
Unless it can substantially improve its productivity performance, Victoria will continue to be the butt of sneering from richer states.
State and federal oppositions will draw encouragement from the byelection result. But neither has shown voters a coherent and credible budget and economic strategy.
The state’s parlous finances mean voters are bound to face a combination of cuts in government spending and increases in taxation.
Consumer prices have been rising. But its costs not profits that have been doing the driving.
The new chairwoman of the Productivity Commission has an opportunity to help reverse one of the most ill-advised public policy decisions of this century.
It is outrageous that the federal government is adding billions to its budget deficit to enable the only government in Australia with a surplus to run an even bigger one.
The ‘two quarters of GDP decline’ definition has never accurately plotted Australia’s ups and downs. The trick is to err in the right direction in dealing with downturns.
Federal and state governments have chosen policies which allowed the virus to spread - and which clash oddly with their usual fixations on public security.
Governments have made a mantra out of following expert advice. Their job is to weigh up expertise, not to pick some and ignore the rest.
Money is being funnelled into domestic spending and boosting the recovery. But locking Australians up in the gilded cage is not good for our living standards in the long run.
Although the Liberals have achieved their aim of preserving their one-seat majority, it wasn’t a particularly good result for them.
Australia is doing better than its peers in managing the pandemic-affected economy and this may increase the pressure on the Reserve Bank, writes Saul Eslake.
