The Victorian Auditor-General’s Report on the Annual Financial Report of the State of Victoria: 2021-22 has revealed the deteriorating finances of our state and the terrible, and growing, debt legacy of Daniel Andrews.
After eight years in government, debt has grown from less than 6 per cent of Gross State Product (GSP) to 19.4 per cent of GSP. It is on a terrible trajectory to 26.5 per cent of GSP.
Victoria’s debt is likely by 2025-26 to be $167.5 billion, more than New South Wales, Queensland and Tasmania combined.
The State made an operating loss from transactions of $15.3 billion and had an operating cash deficit of $4.8 billion.
The General Government Sector (GGS) made an operating loss from transactions of $13.8 billion and had an operating cash deficit of $8.9 billion.
Net Debt for the state increased 2021-22 by $27.2 billion for the GGS.
Frightening new data shows the deterioration in the State’s ability to service the ballooning debt with the Auditor pointing to, “how the ratio of GGS gross debt to revenue has grown from its previous trend around 60 per cent to 143.6 per cent this year. The state Budget estimates growth to reach 221.9 per cent in 2025-26. This growth is slightly above that of the rate of growth in the net debt to GSP ration.” (Figure 2C, page 11-12)
The Auditor-General also warned on cost blowouts on major projects which have occurred right across the Andrews Labor Government’s botched projects. He said, “If the adverse cost outcomes continue, further additional unplanned debt will occur or the announced capital program may need to be curtailed.”
The Auditor-General expressed concerns about the Victrack audit and issued an adverse opinion, noting there were ‘material errors’ in the Victrack financial report. The Auditor said, “the incorrect accounting is material and pervasive to Victrack’s financial report.”
He also said he had at the time of the report, “we were yet to provide audit opinions to the Department of Jobs, Precincts and Regions (DJPR) and the North East Link Tolling Corporation (STC).”
The Auditor-General pointed to serious risks of financial mismanagement at WorkSafe and other government insurance agencies.
Shadow Treasurer, David Davis, said the Liberals and Nationals will put an end to Daniel Andrews’ era of spiralling debt.
“Our plan to cut seven Labor taxes and cap debt is a real solution to support families and small businesses after eight years of Daniel Andrews and Labor.”
“Only a Matt Guy Liberals and Nationals Government will stop Labor’s wasteful spending, support small businesses, reward hard-working families, and boost home ownership.”
David Davis MP
Shadow Treasurer