By guest contributor Ken Atchison
The Victoria Government has reneged on holding the Commonwealth Games in 2026. Incredibly, the government have cited financial prudence as the reason behind its decision.
It is clear that the concurrent retention of the Victoria’s AA credit rating by S&P, which was affirmed in July, was the driver behind the government’s decision. Without pressure from ratings agencies, the Victorian Government would have been happy to keep spending like drunken sailors. Grudgingly, the government has decided on reducing spending by the minimum amount necessary; witness the minimal slowing of Victoria total debt growth in the May 2023 budget forecasts.
The Victorian Premier, Deputy Premier and Treasurer have all shown an incredible capacity for mishandling the finances of the state. They have collectively displayed an inability to produce valid financial analyses, instead relying on apparent back-of-the-envelope financial plans. Add this together with extraordinary cost overruns on various projects and the failure to deliver said projects on time and the only conclusion is this group suffers grievously from financial incompetence.
The Treasurer has stated that “At the end of the day our agency ratings are important, but they are not as important as seeing Victorian families and businesses through the crisis and making sure that they have what they need to get through it.”
Salaries of Victorian politicians and public servants are still increasing; this particular cohort of Victorian families will be just fine. However, other residents of Victoria will suffer the consequences of higher taxes, charges and other imposts which are yet to be determined. Public services such as health, education and emergency services are being slashed. Business failures are at record levels in the state, indicating many are not getting “through it”.
Victoria’s accounts for a good component of the national economy and its woes flow through to the rest of the country. Business costs in Victoria will be higher, not only pushing local inflation rates up but also the national rate. All Australians will suffer from the consequences of Victorian financial incompetence.