Tuesday, 20 December 2022

Economic policy

Brad ROWSWELL (Sandringham) (16:14): Speaker, I congratulate you on your re-election as Speaker as well.

My question is to the Treasurer. The government’s pre-election budget update has confirmed that budgeted spending exceeds budgeted income by $10.2 billion. That is more than $1500 owing for every Victorian man, woman and child. How are families expected to live within their means, especially at this time of year, when this government continues to overspend and to waste?

Tim PALLAS (Werribee – Treasurer, Minister for Industrial Relations, Minister for Trade and Investment) (16:15): I thank the member for Sandringham for his question, and I congratulate him on his elevation to the shadow treasury portfolio. Also, I was a little bit disappointed with the question because I was anticipating that I would have got the question from the head of the economics brains trust from the opposition, the member for Caulfield, but I have been relegated to the B team apparently.

Let us be very clear: as a government we made some clear and sustained choices. During the course of an insidious pandemic that put the wellbeing of the Victorian community at risk we chose to rate their wellbeing above the short-term challenges of our balance sheet. We did that for all the right reasons. We put $44 billion into growing the Victorian economy. We put $13 billion into assisting Victorian businesses to stay whole and to be able to look after and connect with their customers and to keep a connection with their workforce. That is what a government that cares about the wellbeing of the Victorian people and Victorian business does. We have a strategy to deal with the challenges that we confront – we unveiled it in the November 2020 budget. It is our four-step fiscal strategy, and it is demonstrating its worth. We were the only jurisdiction in the nation to put in place a fiscal strategy to demonstrate how we would repair our budgetary position and how we would be able to demonstrate to the Victorian people step by step how that repair works.

The first step was that we would create jobs and that we would grow the economy. Well, we now have 382,000 more jobs in the Victorian economy as a consequence of this government’s effort since the lowest point in the economic cycle in September 2020. That is exactly what this government did – we rated the wellbeing and the employment opportunities of Victorians, getting them back to work and using our balance sheet to assist them in being able to do it. On top of that, we said we would grow the economy. The Victorian economy is now travelling 50 per cent faster than the national average, and that is due to the very strategic investments that we made to grow the economy. The second step in our fiscal strategy was that we would deliver an operating cash surplus, and in this financial year we will deliver an operating cash surplus. We also indicated that the third step was that we would deliver an operating surplus. It is a little bit more complex, a little bit more difficult, to deliver an operating surplus compared to an operating cash surplus because we have to provide for the depreciation of the state assets, but we are still on course to be able to deliver that operating surplus by 2025–26.

Finally, we indicated that our final step in this strategy, once we brought the budget back into surplus, was that we would begin to manage and bring down our debt profile, and we have already made a very substantial contribution to that. A $10 billion Future Fund by the end of the forward estimates will ensure that we have the right capacity to intervene and to make appropriate decisions about debt management until of course we are in a much stronger position for the purposes of drawing down on that position – unlike those opposite, who had a strategy which was all about focusing on their welfare and their own short-term political objectives. Let us not forget that on the Thursday evening, presumably after a long lunch, there was a purported attempt to cost –

Brad Rowswell: On a point of order, Speaker, reflecting upon members in the other place is unparliamentary. I would ask you to provide some guidance to the Treasurer about that comment he just made.

The SPEAKER: Order! I ask the Treasurer to come back to answering the question.

Tim PALLAS: Let us just remember that those opposite did not tell the Victorian people until the Thursday before an election that they had a plan. The plan was effectively that they were going to clean out the Future Fund. It was a little bit of creative accounting, I have got to say, to effectively flip a realised value on an asset and put it onto the output side of the ledger, but we will not worry about that. I am sure Treasury will be able to provide an accounting for dummies course for you at some point.

The second thing that they did not tell the Victorian people until the Thursday before an election was that they had a $6 billion savings strategy and that they had not confided in them exactly what the plan was. And remember there was a proposal to privatise – to sell off essential services of the state. All of that those opposite failed to share with the Victorian people. No wonder they did not share it with the Victorian people, because it demonstrated that the party that is supposed to be fiscally responsible did not have a clue. And let us not forget of course some $28 billion worth of expenditure in their election commitments compared to a much more modest $11 billion offering both on the capital and combined output side from this side of government. So we know – and I think the Victorian people said it loud and clear – who is the best government to manage the finances of the state and who has a better appreciation of the fundamental principles of accounting.

We start by not confusing family budgets with a state budget. If we did, then of course we would have done the sort of ridiculous strategies that those opposite advocate. We would have prioritised our budget because it was our family budget and not made provision for the wellbeing of the Victorian people. That is a sign of a misallocation and misprioritisation from those opposite. We will continue as a government to make investments in the wellbeing of the Victorian people, to grow the Victorian economy and of course to bring the budget back into surplus. But we will not do it precipitously in a way that would undermine that revitalisation of the Victorian economy. There is a reason why the Victorian economy is the strongest performing economy in the nation, and that is because this government has invested in the wellbeing of the Victorian people. We have shown faith in them, and they have returned that in spades.

Emma Kealy: On a point of order, Speaker, in relation to standing order 58, the content of answers must be succinct, and given we are now into our eighth minute, I think that perhaps the Treasurer could wrap up his answer. Could you please bring the Treasurer back to finalising his response?

Members interjecting.

The SPEAKER: Order! I appreciate the member for Lowan’s knowledge of the standing orders. The Treasurer was being relevant to the question. Has the Treasurer concluded his answer?

Tim PALLAS: Thank you.