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The Guardian
a day ago
- Business
- The Guardian
Is the cost-of-living crisis over? Victoria's new treasurer is optimistic, but housing remains a battleground
Victoria's new treasurer, Jaclyn Symes, is confident cost-of-living pressures will ease by the next election – and that voters will be less concerned about the state's soaring debt once they see the completed projects it has helped fund. In an exclusive interview with Guardian Australia after handing down her first budget in May, Symes also signalled openness to reforming stamp duty. But she hit back at industry groups like the Property Council, calling on them to move beyond criticising current policies and offer solutions: 'Saying, 'Don't do this,' that doesn't particularly help me. I have a policy brain, I like to find problems and fix them.' The upper house leader made history in becoming Victoria's first female treasurer after she was handpicked by the premier, Jacinta Allan, to take over from retiring Tim Pallas in December. Symes inherited a mountain of debt, and the recent budget forecasts it to climb even higher, to $194bn in 2028-29. That's up from just $21.8bn before Labor took office in 2014, after years of rapid public sector growth, major infrastructure spending, the pandemic and subsequent credit rating downgrades. Symes's first budget was sold as a turning point, delivering a $600m operating surplus and a slight drop in net debt relative to the state's economy. It also included unexpected federal windfalls, which Symes defended using to ease cost-of-living pressures – pointing to $18m for food relief as one of her proudest budget items. 'People have asked, 'Couldn't you have had a higher surplus?' Sure. But it wouldn't have felt very good knowing we're not supporting some of those services that people doing it really tough are relying on,' Symes says. Looking ahead to 2026 – the year of the next state election – Symes is optimistic that the cost-of-living crisis that has engulfed Australia will have eased. She says interest rates are coming down, housing supply is growing and, for the first time in years, wages are forecast to outpace inflation. Sign up for Guardian Australia's breaking news email 'All the signs are there. But if we go too early and abandon the people that are still struggling, then I wouldn't feel very proud about that,' she says. She hopes that people will soon be 'feeling more confident and not worrying about the cost of every meal that's going on the table'. 'That's what you want for all Victorians, but that's not the case right now'. Symes also believes that state debt won't dominate the election debate, and that voters will instead be grateful for the infrastructure it's funded, including the Metro Tunnel and West Gate Tunnel, both set to open this year after huge cost overruns. Symes points to Sydney's $21.6bn Metro, which also ran billions over budget but is now popular with voters: 'The day it opened, people were like, 'Oh, actually, this is a worthwhile investment.'' The budget also brought pain for some, with 1,200 public sector jobs set to go, with the treasurer warning more job losses are likely once the government receives the recommendations of a review, a move Symes defends as tough but necessary. 'Do I want people to lose their jobs? No. But I also have a responsibility as treasurer to make sure that we are being cost-effective,' she says. Sign up to Breaking News Australia Get the most important news as it breaks after newsletter promotion At parliament last week, it became clear housing will be a key battleground at the next election. While the premier pledged to get 'millennials into homes' through planning reform and an extension of stamp duty concessions for new apartments, units and townhouses, the opposition announced a revived 2022 policy to abolish stamp duty for first home buyers on properties worth up to $1m. The shadow treasurer, James Newbury, says it would give 'young Victorians the final leg up they need', but Symes is sceptical, questioning both the opposition's costings and the policy's failure to increase housing supply. Stamp duty remains a huge revenue source for the state – forecast to bring in $11bn in 2028-29. But it's loathed by homebuyers and economists. The Grattan Institute's Brendan Coates calls it 'the worst tax in Australia', as it locks people into their homes, discourages downsizing and acts as a 'tax on divorce' – as separating couples will both have to go on to pay it. Many economists have long called for it to be replaced with a broad-based land tax. Asked if she would consider such a move, Symes leaves the door open: 'I'm always open to having discussions about tax reform. I've got the finances to manage so I can't make reckless announcements.' Last week, Symes addressed a post-budget Property Council breakfast, where she faced a tough crowd. Before she took the stage, Lendlease's Adam Williams warned that property taxes would soon make up 47% of the state's total tax revenue. In the Q&A segment, a member of the crowd said tax on foreign investment was 'killing' developers. Symes tried a joke: 'Let's have a show of hands – what's the worst tax? What's your favourite tax?' It fell flat. Newbury called her 'tone deaf' and 'out of touch' and criticised her for previously describing the role of treasurer as 'fun'. But Symes says she's not fazed by criticism, and that she's been underestimated before: told she couldn't be agriculture minister because she wore wedges to a farm and dismissed as attorney general for 'giggling like a schoolgirl'. 'The commentary that actually affects me more than anything else is the young women, particularly high school girls, who say, 'We have a female treasurer. That's so cool.''
AU Financial Review
4 days ago
- Business
- AU Financial Review
Vic Labor hiked taxes to pay down debt. Instead, it rose by $5b
The Victorian government's debt pile in 2026 will be $5 billion greater than forecast two years ago when then-treasurer Tim Pallas slapped businesses and investors with higher taxes to repay emergency funds borrowed at the height of the COVID-19 pandemic. Budget papers show Victoria's net debt will grow to $167.6 billion in the next financial year, despite a 'COVID debt repayment plan' unveiled two years ago that forecast debt would climb to $162 billion in 2025-26, and Pallas declared the government had to bring the balance of emergency borrowings down to zero.
The Age
4 days ago
- Business
- The Age
Victoria pockets another $1 billion from the TAC
The Transport Accident Commission will deliver Victoria another billion-dollar windfall this year, an $800 million improvement on forecasts in last year's budget. The Allan government insists the TAC remains financially sustainable as it receives its second dividend above $1 billion in as many years and forecasts a similar payment in 2029. But the opposition has criticised the move as it lowers the commission's insurance funding ratio, from well above its target to the middle of the range. State budget papers show that in the 2024-25 financial year, the state government will receive a $1.13 billion dividend from the Transport Accident Commission, up from forecasts of $300 million in the last budget. Loading It is the second billion-dollar payment to come from the TAC in as many years after then-treasurer Tim Pallas requested a $1.08 billion dividend in 2023-24 which was approved. The treasurer has the power to request a dividend or 'capital repayment' from the insurer, after consultation with the organisation and TAC minister. The most recent dividend means the Victorian government has now received $2.87 billion from the TAC since 2019, including capital repayments of $255 million in that year and $400 million in 2022. The budget is also forecasting another $1.15 billion dividend in 2028-29, revising previous estimates that would have delivered yearly contributions in the hundreds of millions.
ABC News
20-05-2025
- Business
- ABC News
Hope springs eternal as Victorian Budget promises ongoing infrastructure projects
For a document that pours billions of dollars into concrete infrastructure, the Victorian budget figures feel very shaky. No new taxes, a $611 million surplus, lots of cost-of-living relief like free kinder, public transport for children and seniors: all good right? Yeah … maybe. But the numbers get scary, fast. An eye-watering amount of debt (hey, what's $194 billion between friendly lenders?) means that by 2028-29 more than 9 per cent of what the state spends will be on interest payments. For the coming three years, the state is borrowing between $1.7 billion and $5 billion a year to keep the infrastructure projects going. On cash flow, the Education State is going backwards at a rate of $7 billion to $10 billion a year. The old joke goes: a billion here, a billion there, pretty soon you're talking about real money. The current reality is nowhere near jesting about. In the past decade Victoria had problems other states would dream about — cash pouring in the door, people flooding in to live here and spend, and a healthy economy growing like spring grass. Then bang: the COVID pandemic. Immense spending. A spike in the price of construction materials and the labour cost of mega-projects. More demands on health and education. So here we are. The economic vision of new Treasurer Jaclyn Symes and Premier Jacinta Allan continues the mantra of their predecessors, Tim Pallas and Daniel Andrews, which would be summarised as: That's before immense amounts of spending on social programs — everything from dental vans at schools and $859 million for free kinder for three and four year olds to rebates on power bills and $18 million to help pharmacies deliver more medicines without the need to see a doctor for a script. You can buy or decry the vision, but there's no shifting the government from it. Potentially, the vision is edging towards being made real. Government infrastructure investment is said to have peaked at $24.2 billion in 2023-24, part of an immense $213 billion in projects underway. That cost will "moderate", the papers suggest, to $15.6 billion by 2028/29. Similarly, the debt position is set to improve. The ratio of net debt to gross state product — the value of all the goods and services created in Victoria in a given year — is set to fall from 25.2 per cent in the 2026/27 financial year to 24.9 per cent two years later. If ratings agencies change their mind about the state's 'rating' (which affects the costs of borrowing money) maybe even faster. The calculations and detail of how the budget will be trimmed in are similarly fingers-crossed and difficult to divine. The promise is $3.3 billion in savings over the coming four years, which is called the "forward estimates" period. But how? You tell me. This is what is listed — a theoretical $3.3 billion list that boils down to seven dot points. To save a lot of words: cuts. But here they are. To make it clear: cuts. Cuts to programs aren't necessarily a bad thing, nor is reducing expenditure growth. But the detail — what they'll cut, who will go — has been kicked into the future. Much of it is in the hands of the ongoing Silver Review that won't land until June. Around 1,200 employees will go, although many of them are "not necessarily real people" the Treasurer noted, but roles that aren't being filled when they end. Previously the figure discussed has been 3,000 roles. So that means a lot more when the review lands. "Entities" like government agencies will be cut or absorbed, but again it's difficult to define and kicked into the future. One of the most surprising numbers is that the Victorian government is projecting population growth to fall — for the longer term. (Don't worry, Melbourne will soon be larger than Sydney due largely to our access to land for housing and the lower cost of it.) The Education State has roared by putting the richest and most mobile young international students into universities and education institutions, luring many to stay permanently. Federal government changes put a hammer through that mirror. What is currently a 2.4 per cent population growth rate for 2023/24 is projected to fall to 1.7 per cent for the forward period the budget looks at. That's a problem for the fairly simple finances of the Victorian government. Money comes in through grants from the federal government, which is largely the result of the goods and services tax (GST) and income tax. The rest of the cash comes from state taxes on employment (largely payroll tax), land transfer fees — better known as "stamp duty" — and land tax. All of these elements are based on population. That's people coming to Victoria, buying a house, keeping it, being employed here. Victoria doesn't get royalties from resources. ("Unlike WA where they can literally dig money out of the ground," Jaclyn Symes noted dryly.) So Victorians have to make their own way. The vision is of connected suburbs, a thriving capital city and healthy regional centres all bustling with happy new arrivals. There's just a lot of hope involved in getting there. Close your eyes, put down the pedal and drive over the unfinished bridge.
The Guardian
20-05-2025
- Business
- The Guardian
Victorian budget: treasurer keeps eye on election in balancing act between spending and reining in debt
Eighteen months out from a state election, Victoria's new treasurer, Jaclyn Symes, has handed down a budget that feels more like a campaign launch than a serious plan to repair the state's battered finances. There's an understanding among Labor MPs that winning a fourth consecutive term in 2026 won't be easy. This budget appears designed to give the government a long runway toward that goal. It also bets Victorians will remember what got built, not the debt incurred to build it. As the first female treasurer in Victoria's history – and the first person other than Tim Pallas to deliver a budget in a decade – expectations were always going to be high. But even so, Symes's first outing felt underwhelming, perhaps because most of the new spending was announced before Tuesday's media lock-up – or simply because there is so much of it. Sign up for Guardian Australia's breaking news email Despite warnings from ratings agencies and economists that the state must rein in spending and address its ballooning debt, the 2024-25 budget instead splashes billions – including $11.1bn in additional health funding, $5bn for public transport, $1bn for roads and a $2.3bn cost-of-living package that includes a $100 power saving bonus for concession card holders, free public transport for children, and free weekend travel for seniors. It's clearly geared towards families (Symes mentions them eight times in her budget speech) and much like last year's there's little on offer for young adults, couples without children and those hoping to buy their first home – despite Jacinta Allan's pledge last year to be the premier 'who gets millennials into homes'. For the business sector, which has often criticised the government in recent years, the budget offers an olive branch: no new or increased taxes and a $627m support package. There's also an admission in the budget papers that Victorians already pay more tax per person than any other state or territory. The Victorian Chamber of Commerce and Industry described the budget as a 'positive sign'. Symes on Tuesday told reporters the budget was 'responsible' and insisted the government can invest in services and infrastructure while managing debt. She pointed to the $600m operating surplus forecast for 2025-26 – the first since the Covid pandemic as evidence of this. But when infrastructure and capital spending are included, the cash bottom line is $12.2bn in the red in the next financial year, with deficits as far as the eye can see. Even the modest surplus is $1bn lower than predicted in December, despite a windfall in GST and $3.3bn in cuts across the public sector – with more to come. Symes said it was a deliberate decision to forgo a larger surplus and put that money into 'the priorities of Victorians'. 'Budgets are all about balance,' she said. 'Yes, it [the surplus] could have been higher. We chose the priorities of Victoria that hopefully you can get a sense of in the budget and what we've announced today.' Symes described the state's net debt as 'declining as a proportion of the economy' – a claim that is technically accurate, but only just. While net debt as share of the economy is forecast to dip from a peak of 25.2% in 2026-27 to 24.9% by 2028-29, that 0.3 percentage point fall is marginal. In reality, the state's net debt shows no sign of peaking. It is set to grow from $167.6bn in 2025-26 to $177.4bn in 2026-27, $185.2bn in 2027-28 and then $194bn in 2028-29. Employee expenses are projected to remain flat, growing at just 2.9% annually across the forward estimates. It's an optimistic assumption, alongside other rosy forecasts contained within the budget. Victoria remains in the weakest financial position of any state, reflected in its 'AA' credit rating – the lowest in the country. Rebecca Hrvatin, an analyst at S&P Global Ratings, said there were no big surprises in Tuesday's budget and the state was progressing its 'protracted fiscal recovery'. But that's about as positive as it gets. Hrvatin emphasised that Victoria must remain committed to its slow-motion budget repair if it wants to maintain its credit rating, but questioned the government's commitment – especially with an election looming in November 2026. 'Reining in growth in public spending, including the government's wage bill, and achieving promised operating savings are key to strengthening its financial outcomes,' she said. 'However, these goals have proven to be difficult to achieve in recent years. Fiscal discipline is important, especially in the lead-up to the 2026 state election because we have seen many Australian state governments lose control of their budgets in the lead-up to an election.' The budget highlights infrastructure projects due to come online by the end of this year: the Metro Tunnel, West Gate Tunnel, Footscray hospital and the redeveloped Frankston hospital. Three more community hospitals are also slated for completion in 2026. They are all likely to feature prominently in the election campaign, part of Labor's narrative that it 'gets things done'. Reflecting on her visit to Parkville station – one of the flagship Metro Tunnel stations – the day before budget, Symes was already leaning into that message. 'It's pretty amazing, people are going to say for years 'the Labor government did things, they built things, Liberals didn't',' she said. 'I'm confident that that is what people will remember from this period of time.' Not the state of the books. Not the size of the debt. And maybe not even the history made as Victoria's first female treasurer.
