Victoria will take DECADES to pay off $ 155 billion debt as Dan Andrews pulls out cash to get 400,000 people who lost their jobs in the crushing lockdown back to work
- It will be decades before the record debt in Victoria’s large spending budget is paid off
- Budget aims to save the state from the coronavirus-induced recession
- Victorian Prime Minister Dan Andrews aims to create 400,000 jobs
According to treasurer Tim Pallas, it will be decades before the record debt in Victoria’s large spending budget is paid off, but it is “perfectly manageable.”
Pallas and Prime Minister Daniel Andrews spent the budget Wednesday morning, which aims to lift the state out of the coronavirus-induced recession and create 400,000 jobs by 2025.
The budget, which includes an unprecedented spend of $ 49 billion on health care, housing, education and transportation infrastructure, will triple Victoria’s debt to $ 154.8 billion by 2023/24 – about 28.9 percent of the state’s gross product.
Treasurer Tim Pallas and Prime Minister Daniel Andrews spent the budget on Wednesday morning
The budget aims to spend the state out of the coronavirus-induced recession and create 400,000 jobs by 2025 (photo: one person being tested in Melbourne)
The treasurer said he has no doubt that paying off the debt “will take quite some time.”
“It will be a long-term strategy that must be addressed,” he told ABC Radio National on Wednesday.
“Yes, it will take decades.”
Rating agency S&P said there is “a one in two chance” that it will lower the state’s rated AAA credit rating. It put the state on credit back in August as it fought a second wave of coronavirus.
“This could happen if we believe the state’s fiscal recovery would be delayed beyond our current expectations or if we believe the state’s financial management has weakened,” he said in a statement.
John Manning, vice president of Moody’s Investors Service, said Victoria’s second lockdown had “seriously eroded” the state’s fiscal position and “weakened its ability to pursue a timely fiscal recovery.”
While record low interest rates will allow the state to absorb such a surge in debt, borrowings will remain high for a longer period and Victoria’s operational profile will be significantly curtailed over time. he said.
Mr. Pallas said the debt as a percentage of Victoria’s income base would increase from about 3.4 percent to 4.4 percent.
“It’s something that is very deliberately done by the government,” he added.
The prime minister said the government was following the advice of Reserve Bank governor Philip Lowe to borrow given the low interest rates.
Woman in face mask walks as sun rises over Albert Park Lake in Melbourne (photo Wednesday morning)
The second wave hit the Victorian economy, business has only just started to recover after the lockdown (photo: people enjoying a meal at a Melbourne cafe)
A shop assistant wearing a face mask serves a customer behind a shield while processing a sale at a large department store in Melbourne, Australia
This is a budget for its time, this is a one-in-100-year event and the only credible, the only viable way to create jobs, opportunities, that sense of spark and dynamism back into the Victorian economy is by investing, ”Mr. Andrews told reporters.
“Yes, there are loans and they have to be paid off, and they have to be paid off over a long period of time. But just as those projects are important now, they are also important to our children and our grandchildren. ‘
He said the public debt was much smaller than that of the federal government in its budget.
“I’m not reporting you a trillion dollars in debt, and that’s where the federal government is,” he said.
‘We are now investing in the right way to get this place going again.’
Mr Andrews also defended the absence of Budget Document No. 4, which covers expenditure on infrastructure projects, saying that it is “difficult to get a grip” on the effects of the pandemic.
He said the newspaper would be in May or June in the next state budget.
The opposition has claimed that the failure to release Budget Document No. 4 has effectively handed over a “blank check” from taxpayers to the government.