It disappoints me that once more I write about Victoria’s headlong cost in the direction of a monetary cliff, which we’re going to really feel by means of decreased companies or rising taxes.
As quickly because the state authorities refocuses on what’s inexpensive and its duty to Victorians, significantly our younger individuals, I additionally will change route.
The state authorities must be jolted out of its consolation zone, into the true world, and perceive the implications of the coverage the Andrews/Allan authorities is foisting on Victorians.
There are three ways in which might occur.
The federal authorities ought to present no extra funds for the Suburban Rail Loop Authority. At worst, it ought to at the least defer that undertaking till a enterprise case is finished proving its worth.
Victoria can not afford to borrow for an additional $200bn-plus undertaking.
Second, Bridget McKenzie, a Victorian senator, is contemplating a senate inquiry into all elements of how the Victoria authorities bought to the purpose of commissioning an costly piece of infrastructure with no sturdy enterprise case.
Each Victorian federal politician ought to assist such an inquiry, for if this undertaking goes forward it is going to have an effect on these Victorians who depend on authorities companies most – these on pensions, low incomes and the younger. Why? Just because increasingly of the income the federal government receives every year shall be spent paying the curiosity on our debt and never on primary companies.
Third, one should query the position of scores companies that supposedly charge an organization or authorities on its monetary situation given their debt and the insurance policies they’re pursuing.
A type of companies, S&P International Rankings, final weekend stated it had been warning the Victorian authorities since 2016 about its spending. Just like the state ministers who’re blaming Covid for a lot of the debt (garbage, the most important contributor to state debt is the badly managed infrastructure tasks which might be all working over price range and over time), S&P International is doing the identical.
S&P International downgraded Victoria’s score by two factors in December 2020 to a lowly AA. That was three years in the past. One has to query S&P International’s relevance as Victoria’s financial situation has continued to say no as our debt grows.
Whereas each fall in our credit standing ends in Victoria having to pay extra curiosity on its money owed, as occurred to my authorities in early 1993 having simply taken over from the Cain-Kirner authorities, it centered our consideration on lowering debt and rebuilding the economic system.
If S&P International and the opposite scores companies had been doing what they need to be doing, they might have once more decreased Victoria’s credit standing.
It is likely to be sufficient to jolt the Allan authorities again into the true world the place an excessive amount of debt results in insolvency, or at the least administration.
Prime Minister Anthony Albanese is speaking sensibly, saying subsidies solely add to inflation and keep away from going through the fact of the day.
Federal Treasurer Jim Chalmers can be speaking financial restraint, and having introduced down one price range surplus may achieve this a second time on account of royalties and taxes the federal government receives on excessive costs for our fundamental exports, iron ore and coal. That’s the reason the most recent predicted tax windfall of $18bn needs to be used to cut back the nationwide debt.
To be constant, it’s why the Prime Minister and Treasurer ought to say no to giving the state authorities any cash for a undertaking that’s massively costly, badly conceived and has not been proved – and the state and nation can not afford.
It’s why Senator McKenzie and all Victorian politicians ought to assist a significantly carried out senate inquiry into the Suburban Rail Loop.
Who steered this undertaking, who had been the consultants used to show the case for it, what if any are its advantages, how can Victoria afford such expenditure, and the place is the cash coming from?
Bear in mind, Victoria’s debt is nearly $200bn in the present day. When the present infrastructure tasks are completed, we are going to nonetheless have greater than $200bn of debt, and any income collected from the tasks will go to the non-public sector by means of the tolls we pay, so no discount in state debt, and one other $200bn to be borrowed to pay for the Suburban Rail Loop.
Am I the one individual anxious about the place Victoria is headed?
Why, like lemmings, will we as a group stay silent as we’re about to be pushed off a monetary cliff? Time for somebody to behave!
Jeff Kennett is a former Premier of Victoria
Initially printed as Jeff Kennett: Suburban Rail Loop putting Victoria on track to financial ruin