Victorian election 2022: Labor promises a surplus of 1 billion USD by 2026

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Wearing high-vis and hard hats, Premier Daniel Andrews and Deputy Prime Minister Jacinta Allan toured the tube tunnel at the future Arden Station to spruik Labour’s Big Build project.

Leasing two of Melbourne’s biggest sewage treatment plants would reap $6.7 billion over four years under the Coalition’s plan, calculated by the Parliamentary Budget Office.

The proceeds will be transferred to the Future Fund, which will be drawn down by $10.2 billion from 2024-25.

Hayward said it would end up costing Victorians money through their water bills.

“It’s essentially moving money from one side of the Victorian public sector to another, and the cost has to be borne by people who have water bills,” Hayward said.

Davis could not say how much revenue would be lost by reducing the Future Fund or how much the state would save on interest, but believed it would have a net benefit.

“We think overall it will be a positive step,” Davis said. “We think it is the right thing to lower the state’s debt.

“We see that not only will it mean lower interest rates, but it will mean that in the future the state will not be in a position where a future government can attack it and misuse the money.”

The coalition also said it would find $5.1 billion above forward estimates by eliminating waste. Davis said that did not mean public sector job losses.

At 6.30pm on Thursday, the opposition clarified that it would save, cut and reprioritize $38 billion while spending $28 billion on new commitments over the next four years.

The deficit under a Guy government would be larger next year than under Labour, but net debt would be $10.4 billion lower in 2025-2026. According to the documents, the profit would have been greater a year earlier.

In a final pitch to voters, Pallas declared that all Labour’s campaign announcements had been fully funded, “providing a massive boost to the economy without privatizing, increasing net debt or introducing new taxes”.

“Because all of our investments are more than fully funded, the 2025-26 surplus will now be more than $1 billion,” Pallas said. “That’s a turnover of 11 billion dollars in just three years.”

The government also hopes to claw back more than $3 billion in savings, including $200 million from a crackdown on the state bureaucracy’s use of labor and consultants.

Hayward said those shifts could also be called downsizing, which he said Pallas had not fully explained Thursday.

Labour’s platform was independently checked by the Treasury, while the Coalition used the Parliamentary Budget Office, meaning the documents are not easily comparable.

Both sides have used the campaign fighting for the economic highlandswhere the opposition has yet to release its political cost document.

The tally of Labour’s pledges shows it announced 89 spending and austerity initiatives during the campaign, worth a total of $3.27 billion over the next five years. After factoring in the new spending announced since the Treasury’s pre-election budget update released at the start of the campaign, Labor estimates the state is on track to record a $10.2 billion deficit this financial year.

But it predicts the state’s precarious financial position will improve rapidly as the economy continues to accelerate out of its COVID-induced crisis, with a projected deficit of $3.6 billion for 2023-24 and then a relatively narrow deficit of 534 million dollars the year after that.

Labor believes the state’s financial fortunes will be fully reversed by 2025-26, with a surplus forecast of just over £1bn.

If delivered, this will allow the start to finally start paying down Victoria’s massive public debt, which is expected to reach around $166 billion by June 2026corresponding to about a quarter of the total value of the national economy.

But a tally showed that the budget would in fact have remained mired in deficit had it not been for a $1.1 billion “drawdown” taken from “output contingencies”.

In keeping with one of the campaign’s key themes, by far the biggest spending announcements were in health. Labor announced $619.9 billion in ongoing health care spending and more than $4 billion for new and upgraded hospitals.

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Labor budget documents showed Labor plans to claw back $3 billion by delaying payments to a fund set up to meet the state’s massive unfunded pension liabilities that arose during the 1990s.

The costing document showed that a large proportion of capital expenditure, particularly on hospitals, has not been allocated to specific years, with a significant portion unlikely to hit the budget until after the next term.

Davis jumped on the $4 billion shortfall in health and hospital promises that Labor has not included in its forward estimates.

“This means that either these hospitals will not be built – or even started for the next four years, or net debt will be significantly higher under Labor than the current projected $165.9 billion,” he said.

Davis described Labour’s accounts as “a lemon”.

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