Labor’s budget an economic ticking time bomb

This is the Budget the Labor Party did not want Victorians to see before the federal election.

And now we know why. Because this Labor Budget is an economic ticking time bomb built on higher taxes and more than doubling debt.

Taxes are up, again. Projects have blown out, again. Debt is up, again.

Economic growth is slowing while unemployment and cost of living are rising. And Daniel Andrews’ answer is to introduce more taxes and increase debt. The week of the 2018 election when launching Labor’s economic costings, Tim Pallas promised:

“This document is Labor’s Financial Plan for the next four years. It contains no new taxes, whatsoever. No tax increases, no extra charges, it's all there in black and white.”

This Budget breaks that promise 6 times.

The total of new or increased taxes since Labor was elected is now 20, with this Budget introducing gold mining royalties and corporate restructure duty as well as increasing luxury car tax, foreign stamp duty, foreign land tax and land tax for homes with contiguous blocks on a separate title. These new and increased taxes announced in the Budget 2019-20 papers will raise an extra $832.3 million alone.

Victoria is the highest taxing state in Australia. Taxes are now up 36% under this Andrews Labor Government, raking in an additional $24.4 billion since being elected. Land taxes have more than doubled under the Andrews Labor Government, now up 109%, an additional $5.4 billion since Labor came to government. And payroll taxes are now up 27% since Daniel Andrews was elected, an additional $4.1 billion.

Debt is now up to $54.9 billion, compared with just $20 billion in 2017/18, an eye-watering increase of nearly $35 billion. Net debt to GSP is expected to rise to 10% - the highest in living memory.

Public sector wages have now blown out by 42% under this government but critically with no real increase in frontline services. Victoria has grown by over 600,000 people in the last five years but this Labor Government is failing to put money into the frontline services to meet our growing population.

Treasury is forecasting a slowdown in growth of the Victorian economy from 3.5% at the beginning of last year to 2.75% this year and over the forward estimates. The government’s own figures show unemployment will increase from the current rate of 4.5% to 5.5%. Employment growth is set to slow from 3.25% to 1.75%.

These aren’t just numbers on a spreadsheet, this is tens of thousands of families impacted by job losses because of this government’s economic mismanagement. On the eve of the 2014 election on Channel 7 with Peter Mitchell, Daniel Andrews promised no new taxes.

Peter Mitchell: “Do you promise Victorians here tonight that you will not increase taxes or introduce any new taxes?”

Daniel Andrews: “I make that promise, Peter, to every single Victorian.”

The Andrews Labor Government has now broken those promises 20 times. This is a job-killing Budget that hits the hip pocket nerve of Victorians. This is a budget that is built on heroic assumptions, which if they don’t eventuate, will place a ticking time bomb under our economy.

Louise Staley MP

Shadow Treasurer

Recent Posts

See All