Victorian state governments $165bn debt

Not just property investors struggling with their interest repayments by the sound of it.
Food for thought for those saying the government are the best placed to build more affordable housing...

Federal budget, Victorian budget: Anthony Albanese must not bail out Daniel Andrews

The forecast expansion of Victoria’s state debt from $115 billion to $165 billion over the next four years will collide with rising interest rates and will push up the cost of servicing the debt to more than $7 billion a year by 2026.

The state budget is being hit by the escalating price-tag of Labor’s massive debt-funded infrastructure program amid continued cost blowouts on major projects under a state government controlled by the party’s Socialist Left faction.

The Victorian Liberals calculate more than $30 billion in waste and cost blowouts under the Andrews government including the North East Link, West Gate Tunnel and Metro Tunnel.

 

Victorian budget 2023: Daniel Andrews in talks for ‘more support’ from PM ahead of budget

 

Geez, and we keep voting him in.

 

To quote an Age correspondent: "Daniel Andrews won because he builds things you can see: roads, railways, hospitals. When COVID-19 arrived he ignored the complaining and did that “making the hard decisions” thing people talk about. He got on my nerves but he got on with the job"

 

All well and good, but made somewhat less impressive by doing so through racking up more debt than Qld, NSW and Tasmania combined, then having to go cap in hand to the federal government for a bailout.

 

Yes. Being able to pay for these is the hard bit. And shutting down your economy for so long after ****ing up your covid program with hired "security" will make it increasingly hard to pay.

 

Bailout! It’s a nice easy answer to a major problem.

Seems to me that the State has lost control over this important matter.

 

What I love is how when people talk about debt, facts and figures don’t matter.
Like how NSW has higher debt than Victoria over the forecast period to 2026. So maybe not all three states combined?
Maybe don’t take your arguments from sky news.

 

I haven’t seen any data showing NSW has a higher debt than Victoria. Can you provide any sources for this please?

 

NSW state debt is forecast to be $188.2b Overview: Our plan for NSW | NSW Budget).

Vic is 166bn at the same time The great Victorian budget mystery: who will repay its massive ‘Covid debt’? | Victorian politics | The Guardian.

 

Looking at debt levels without looking at gdp is like comparing people’s mortgages without looking at income and assets.

 

GDP is kinda useless as well as it largely doesn’t change a states tax inflows.
The state/Cth funding in Australia is a convoluted mess. States should never have lost their ability to raise income taxes, as they are beholden on the Cth who only use funding to chase votes.
Meanwhile the states need to somehow fund a lot of the services we actually need (education, health etc)

 

Good post just shows how hysterical people are. NSW economy is 700b odd vs 530b in Vic.

If you look at debt to GDP NSW is at 27% whilst Vic is at 31%

Still low by international standards. Shows how uneducated people are in economic matters.

 

That last line is the key point. International comparisons would indicate our states debt is rather conservative.

So no, the states are not going broke. Cth need to start doing heavy lifting though on policy, too long have been sitting on their hands. This has resulted in states deciding to go their own ways which is inefficient.

 

You can't look at State Debt to State GDP ratio in isolation and say "it's low, everything is all right". That State GDP forms part of the Federal GDP that also has to service the $900bn gross debt there too.

If NSW is 1/3 of the country, then NSW's share of that commonwealth debt to service is $300bn.

So we citizens of NSW have 188+300= $488 billion of debt to pay.

 

I did the numbers on this recently NSW state debt is like 188b...Vic 165b. NSW population is 8.3m....vic is 6.8m. So in portion as a % of GDP Vic is 31% and NSW like 28%. Still very reasonable on a global scale

 

You missed my point. What's $488bn debt as a % of $700bn GDP?

You can't count the NSW GDP as separate to the Commonwealth GDP - it's double counting.

And with Treasuries rates at ~4%, that's $20 billion of interest NSW taxpayers are forking out on State and Federal debt each year.

 

Which is peanuts......

 

Pete Wargent Daily Blog: Tough decisions for the indebted state

A discussion about the debt.