Victorians are subsidising the rest of Australia: Treasurer of Victoria

“The removal of $3 billion from the State’s allocation of infrastructure funding means we’re actually subsidising other states’ infrastructure,” Treasurer of Victoria, the Hon. Tim Pallas told a CEDA audience in Melbourne.

“Per capita we’re simply not getting our fair share of infrastructure spending,” he said. 

“The Commonwealth argues that a compact state like Victoria needs to spend less on infrastructure.

“I’d argue that it’s our population density relative to the rest of Australia that’s driving the need to invest in new infrastructure. 

“Quite often it’s the tyranny of proximity and urban congestion that brings the greatest costs associated with building infrastructure in a built-up environment.” 

Mr Pallas said the decision by the Commonwealth to remove $3 billion from Victoria’s infrastructure allocations was at odds with the signal that the Prime Minister himself had given.

“It’s a little difficult to tell exactly what the Commonwealth is trying to achieve in respect of the treatment of East West funding in their budget,” he said.

“To see $3 billion withdrawn from Victoria on the stroke of a pen, without any forewarning, a week after we’d framed our own budget – that’s a sign of what I would call the closest thing to juvenile behaviour when it comes to managing an economy I could think of.   

“To have every Victorian subsidising the rest of Australia to the tune of $122 … is an affront (and) is an insult to our Federation.” 

Mr Pallas said the Victorian Government will continue to work with the Federal Government but won’t be voluntarily handing back any funds.

If the level of animosity directed at the Victorian people to the extent of $122 each to subsidise the rest of the nation is something they want to carry through on, so be it,” he said. 

“But we will fight it every step of the way. 

“Despite the hurdles that the Commonwealth Government has thrown up, this (state) budget delivers the commitment that the Government took to the people of Victoria at the last election. 

“This is the biggest ever education budget, it includes a massive boost for hospitals, it commits record funding for public transport and it will support the creation of 100,000 jobs.” 

Mr Pallas said the state budget restores funding to those services that were cut by the previous government.

“The previous government limited expenditure growth to just 2.5 per cent on average per year,” he said. 

“Taking into account inflation and population growth, this simply could not deliver the services that Victorians need.

“The restoration of services to Victorians begins with the biggest education budget in the State’s history.

Mr Pallas said the budget also:

  • Invests $2.1 billion in Victoria’s health system; 
  • Has an extensive infrastructure program delivering $5.2 billion in capital expenditure this year, and $6.5 billion capital expenditure next year; and 
  • Delivers record investment in public transport.