Dan Andrews must take the blame for Victoria's budget black hole

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• By Avi Yemini

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Economists have cautioned the Albanese government against favoring Victoria to the detriment of other jurisdictions, after Premier Daniel Andrews pushed for more Commonwealth funding ahead of the May budget.

Despite State Treasurer Tim Pallas’ expectations to reach an operating surplus, Victoria’s net debt is forecasted to reach $165 billion by 2025-26, while the state faces tough budget constraints.

Andrews came under criticism in the lead up to the recent State election for his promises of 'free' benefits to Victorians on a range of political initiatives with critics pointing out that the 'free' costs would only add to his government's skyrocketing debt.

Dan Andrews promised lots of “free” things at the 2022 Victorian State election, now he is unashamedly begging for a federal bail out from fellow Australian taxpayers! What a disgrace! 🤡 #springst pic.twitter.com/oi6Hnoxcth

— Lady Liberty 🌸🗽🇦🇺 (@ladylibertyWAus) April 11, 2023

But Andrews deflected blame, accusing the former Coalition government of depriving Victoria of its fair share of infrastructure and GST carve-ups. He has been advocating for more federal support and denied seeking a bailout.

However, economists, such as Ross Garnaut, have warned that any deal that disadvantages other jurisdictions must be avoided.

“Victoria’s got every right to be grumpy about the stupid GST deal that Western Australia gets, but that doesn’t say ‘do a stupid Victoria deal’,” Garnaut said.

Karen Batt, the Victorian secretary of the Community and Public Sector Union, said that all health jobs support service delivery, and that programs would collapse if public sector workers were cut. Health Minister Mary-Anne Thomas, however, confirmed that no frontline jobs or frontline health programs would be cut, and all election promises would be delivered.

Meanwhile, Victoria’s ambitious infrastructure projects, which have suffered from cost overruns, have put the state in a worse position. Economists like Saul Eslake said that Victoria’s financial concerns were largely self-inflicted, and now is the right time to make tough decisions early in the four-year election cycle. Eslake said that despite Victoria’s “outrageous” GST carve-up and a shortfall in infrastructure spending, there was an argument for additional support for the state.

“Whatever the federal government is inclined to do isn’t going to eliminate the need for Victoria to make challenging and unpleasant decisions,” Eslake said.

Federal Treasurer Jim Chalmers acknowledged that all budgets were under pressure, and the Commonwealth would do its best to assist Victoria in the upcoming federal budget. The Victorian opposition finance spokeswoman, Jess Wilson, accused Andrews of seeking federal funding instead of keeping major infrastructure projects on budget.

The federal budget will be presented on May 9, followed by the state budget on May 23. The government is yet to confirm whether the hospitals will be funded on a 50-50 basis with the states.