VIC: Public service job cuts on cards for state budget, as interest rates bite

[#Metro]

Public service job cuts on cards for state budget, as interest rates bite

Victorians have been told to brace for difficult budget decisions as the Andrews government struggles to offset a multibillion-dollar financial hit linked to rising interest rates, with cuts to public service jobs being considered.

Premier Daniel Andrews this week bluntly warned that the upcoming May 23 state budget would involve "very difficult" decisions needed to stop Victoria's "extraordinary" debt levels from hampering the "next big wave of reform".

Public service job cuts on cards for state budget, as interest rates bite
https://www.theage.com.au/politics/victoria/public-service-job-cuts-on-cards-for-state-budget-as-interest-rates-bite-20230324-p5cuzt.html

[Gazza]

Ooooh public sector cuts!

That'll get @metro and @verbatim9 excited and posting slabs of text from googled economics articles!

[#Metro]

Corrections are being shrunk

The state government is under fire over staff cuts at Melbourne prisons. Generous early retirement packages have been offered to workers as Spring Street scrambles to contain the state's spiralling debt.

Public servants brace for job cuts as Andrews prioritises Big Build
https://www.theage.com.au/politics/victoria/difficult-decisions-budget-razor-comes-for-victoria-s-human-rights-agency-20230316-p5csk8.html

Victoria's human rights watchdog has announced looming job cuts ahead of the May budget, and public servants are bracing for further reductions as rising interest costs place further pressure on the state's finances.

Staff at the Victorian Equal Opportunity and Human Rights Commission were informed of a sweeping restructure on Wednesday afternoon, due to a "significantly smaller budget for the foreseeable future".

[#Metro]

Victorian government in talks to secure a bailout in upcoming federal budget

https://www.skynews.com.au/australia-news/politics/victorian-government-in-talks-to-secure-a-bailout-in-upcoming-federal-budget/video/3867c24227f1cc01f089711eeb9119c5

Victorian Premier Daniel Andrews is in talks with Prime Minister Anthony Albanese to secure a bailout in the upcoming federal budget.

After the world's longest COVID-19 lockdowns, Victoria's state debt has climbed to a record $115 billion and is expected to grow to more than $165 billion by 2025-26.

Mr Andrews has already confirmed the public sector can expect cuts of around 10 per cent.

[#Metro]

Interesting opinion piece article in Australian Fin Review.

Victoria's state debt the nation's largest: shadow treasurer
https://www.afr.com/politics/victoria-s-state-debt-the-nation-s-largest-shadow-treasurer-20221121-p5c03u

As a proportion of Gross State Product, it's high for VIC.

But there is some good news buried in this graph - QUEENSLAND is doing very well.

Must be all of the rail projects etc. that they are delaying 



(Note - Graph doesn't include the ACT)

QLD consistently the lowest out of all the states or territories listed. Current rating is AA+.

https://www.qtc.com.au/institutional-investors/credit-ratings/

NSW is currently AAA.

https://www.treasury.nsw.gov.au/nsw-economy/about-nsw-economy/states-credit-rating#

This is despite NSW having a larger debt to Gross State Product Ratio. The ratings process looks at many things not just top-level things like Debt/GSP.

Based on this, Red Team seem to have done well in QLD. 

[#Metro]

Melbourne Airport Rail link shelved

[ozbob]

The Age --> Big-ticket transport projects face delays as budget pressures build $

The Andrews government has put a high-speed rail service between Geelong and Melbourne on the back burner, an insider says, amid speculation budget pressures are also threatening to delay the big-ticket Melbourne Airport Rail project.

Any delay to the Geelong Fast Rail project will also hold up the long-promised faster train services through Melbourne's west, as the government has repeatedly said the Geelong line needs to be completed before the Western Rail Plan. ...

[#Metro]

Victoria's budget pain – 10 years of new taxes, thousands of jobs cut and debt soars | 7NEWS

Victorians are facing a decade of new taxes to pay off spiralling debt, set to cost taxpayers $21 million a day in interest. It's just part of the pain in a state budget that's under fire for slashing jobs and failing to deliver cost of living relief.

[#Metro]

Victoria's budget targets landlords, big business and private schools

Economically, taxes "on businesses" are simply passed on to one of three groups (or a mix):

- Workers (through lower wages)
- Owners/Investors (through lower returns)
- Customers (through higher prices)

[Gazza]

- Owners/Investors (through lower returns)
😍😍😍

[#Metro]

What drives Daniel Andrews?
Sumeyya Ilanbey has written a tough but fair-minded account of the high-handed premier

Tim Colebatch Books 24 October 2022
https://insidestory.org.au/what-drives-daniel-andrews/

Ilanbey tells us that Andrews developed quickly as a factional warrior: "He became known as Alan Griffin's 'numbers man,' the main go-to guy for the Socialist Left's branch-stacking operation in the south-eastern suburbs, a meticulous and detailed young operative whom Griffin trusted wholeheartedly." Apart from student jobs selling hotdogs and driving trucks, it was his first real job.

His career since has been entirely inside Labor. At twenty-three, branch stacker in an electorate office. At twenty-six, assistant state secretary. At thirty, the new MP for Mulgrave and assistant minister for health. At thirty-four, gaming, consumer affairs and multicultural affairs minister. At thirty-five, health minister. At thirty-eight, Labor leader and opposition leader. At forty-two, premier. He is now fifty.

(bold added)

[#Metro]

There are growing fears more renters will face homelessness as up to half the state's landlords consider selling their investment properties. Many say they can't afford to keep them after being hit with the [Daniel Andrews] state government's controversial new land tax.

"The purpose of the tax is to pay for the COVID debt"

[Gazza]

But if landlords sell their property, the house doesn't disappear into thin air.

Either:

Another landlord buys it and rents it out.

An owner occupier buys it, and therefore no longer needs a rental and their old rental is freed up.

Either way, the effect on housing supply is neutral.

[#Metro]

Legal Firm Holding Redlich has listed details of the Victorian Tax Increases:

https://www.holdingredlich.com/victorian-state-budget-2023-24-taxing-changes-to-land-tax-payroll-tax-stamp-duty#

The 2023 Victorian state budget comes with significant changes to land tax, payroll tax and stamp duty announced as part of the government's "COVID debt levy" which will apply until 30 June 2033.

New revenue raising measures will be imposed in an attempt to recover the $31.5 billion in debt that the state accumulated between 2019-20 and 2022-23.

...

From 1 January 2024, the tax-free threshold for general land tax rates will be reduced from $300,000 to $50,000.

(bold added)

[#Metro]

Victorian Budget 2024/5 released today.

Tonne of projects cancelled or delayed because no money = no project.

[#Metro]

Almost certain now suburban rail loop will be axed IMO.

[Gazza]

IMHO running up the credit card in Victoria was the correct response.

If the feds are going to grow the population with thousands of people per year, and leave it to the 3 main east coast cities to cope with it (And Victoria copping it hardest) then what choice do the states have to maintain living standards?
All these extra people need infrastructure.

The response is to spend spend spend to deal with this growth. NSW and Qld need to follow suit.
Eventually it will come back to bite the feds in the backside, who will have to bail them out and finally pay for the results of their policies.

[aldonius]

Perth too; 3.6% growth in 2022-23. In absolute terms, more people than Brisbane (though of course here we need to look at SEQ growth).

[#Metro]

Former PTUA transport advocate Dr Paul Mees was very critical of infrastructure first approaches due to long time to benefit and high cost.

Melbourne already has a high number of train stations, yet some lines are still on 20 min basic frequency during the day.

Lots could be done just focusing on planning and service-first approaches, especially bus reform to feed existing rail.

[Gazza]

Melbourne has a high number of stations but the distribution is not very even.

Awesome if you live inner north though.

Also, I thought a lot of the reason they were spending so much on infrastructure is because it's not practical to run high frequency services on a network with so many level crossings.

[#Metro]

Almost a billion dollars added to Victoria's debt to cover metro tunnel blowout | 7NEWS


Interesting piece about the Surburban Rail Loop towards the end.

Almost a billion dollars has been added to the state's skyrocketing debt to cover a blowout on the metro tunnel. The treasurer is scrambling to find a way to cover the bill and has not ruled out tax increases.