Victorian Treasurer Tim Pallas will borrow up big and spend his way out of the state’s coronavirus-induced recession in his sixth budget.
Just hours before the budget is unveiled on Tuesday, Premier Daniel Andrews announced an additional $3 billion (US$2.18 billion) will go towards upgrading and building new schools, creating some 6,400 jobs.
“We know that our system only works best when we make sure that the quality of the buildings matches the quality of the teaching and learning and that’s exactly what this budget will be able to deliver,” he told reporters.
State Health Minister Martin Foley also told the Herald Sun on Tuesday the government will completely overhaul the ageing Royal Melbourne Hospital in Parkville.
Another RMH campus will be built at the Arden Renewal Precinct in North Melbourne, as will a new campus of the Royal Women’s Hospital, as part of a $320 million package.
About $75 million will go towards design, early planning works and land acquisition for a new 24-hour hospital in Melton, in Melbourne’s northwest.
The government has already announced $5.3 billion to build 12,000 social housing units, $5 billion for the new airport rail link, $2.2 billion for the suburban rail loop and $2 billion for fast trains to Geelong.
Some $1.6 billion will go towards supporting students with a disability at school, $868.6 million to new mental health initiatives and $235 million to create 500 new jobs in social services.
A $169.6 million initiative to offer free kinder to Victorian families in 2021 is all about encouraging more female participation in the workforce, while a tourism voucher scheme and $797 million package to help lower-income families pay energy bills is aimed at easing the toll of a tough year.
The budget will plunge into a $23.3 billion deficit in 2020/21, $13 billion in 2021/22 and $6.7 billion in 2022/23 because of the big spend.
Net debt will hit $86 billion this year before growing to $154.8 billion in the 2023/24 financial year.
The government’s infrastructure spending is forecast to average $19.6 billion each year over the forward estimates.
Pallas has repeatedly said now is not the time to chase surpluses.
“We’re using the strength of our balance sheet to repair the hardship caused by COVID-19 on families, workers and businesses,” he said at the weekend.
“We’re following the blueprint of jurisdictions around Australia and the world, who are using their own budgets to protect household and business budgets.”
Almost 200,000 Victorians have lost their jobs since the pandemic took hold in March, while economic output has dropped by four percent.
State tax revenue has also fallen by 11.9 percent compared with 12 months ago, following the summer of bushfires and months of lockdown.
About $13 billion has already been spent to combat the pandemic, with $7.6 billion going to supporting businesses.