55 New Taxes and $200 Billion in Debt After 10 Years: Victorian Opposition Responds to Budget

‘After a decade of Labor, debt in Victoria still remains more than NSW, Queensland, and Tasmania combined.’

People shop for fresh produce at the Queen Victoria Market in Melbourne on July 4, 2023, after the Reserve Bank of Australia (RBA) surprised analysts by leaving interest rates on hold at 4.1 per cent in July. William West/AFP via Getty Images

Victorians are facing 55 new or increased taxes and a record debt of nearly $200 billion after 10 years under the Labor government, the state’s Shadow Treasurer said in a budget reply speech.

The Victorian Labor government unveiled its first budget under Premier Jacinta Allan, called “Helping Families,” on May 7. It showed that the net debt is projected to hit $187.8 billion (US$124 billion) by 2027-28, or $67,000 (US$44,720) for every household.

Speaking in the Victorian parliament on May 14, Shadow Treasurer Brad Rowswell said Victorians were “already paying the highest taxes in the country” with “every man, every woman, every child” having yearly tax bills of $585,834 (US$391,062) floating over their heads.

“After a decade of Labor, debt in Victoria still remains more than NSW, Queensland, and Tasmania combined,” he said.

Victorians have been forced to pay an additional $14 billion (US$9.34 billion) over the past decade as a result of the government’s “blowouts and mismanagement,” he added.

This includes an extra $304 million for the suburban roads upgrade, an extra $427 million for the Victoria hospital, an additional $3.3 million for level crossing removals, an extra $4 billion dollars for the Metro tunnel, and an extra $21.2 billion for the North East Link, among others.

Victorians Burdened By Taxes

Mr. Rowswell noted that since the Labor government took power 10 years ago, it has introduced 55 new or increased taxes, despite former Premier Daniel Andrews’ promise on the eve of the 2014 elections that there would be “no new taxes.”

The 2024-25 state budget, released on May 7, also increased the fire service levy and the waste levy, raising costs for families disposing of rubbish at licensed landfills.

Additionally, a holiday and tourism tax will take effect in January 2025, taxing holidaymakers 7.5 percent on short-stay accommodation platforms such as Airbnb and Stayz, on top of the 10 percent GST.

After imposing extra levies on landowners in its budget last year, the Labor government plans to introduce a new Home Owner Tax on all properties across the state, further increasing the cost of building residential property.

This comes on top of the centre-left government’s more than 30 increased property taxes over the past 10 years, Mr. Rowswell said.

“We’re in the middle of housing availably and affordability crisis. If you tax something, it becomes more expensive. It is as simple as that.”

Investors, Businesses Flee the Market

Amid a rental crisis, Victorian property investors are selling off their investment properties en masse, burdened by COVID-19 taxes, rising maintenance costs, and regulatory restrictions.

According to a 2023 report by Henderson Advocacy, Victoria is becoming a “no-go zone” for some property investors, with changes in land taxes and the 7.5 percent levy on short-stay rentals being the main challenges.

In April, real estate developer Urban Property revealed that new housing in Victoria is slated to be the lowest in seven years, making it harder to meet the government’s decade-long target of 800,000 new homes over a decade.

Rising taxes are also a key factor driving businesses out of the state, with data from the Australian Bureau of Statistics (ABS) showing Victoria’s net decrease of 7,606 businesses during the 2022-23 financial year.

It is also the only state in the country experiencing a drop in registered enterprises. New South Wales and Queensland, on the other hand, saw an increase of 11,031 and 8,147 registered businesses, respectively.

$9 Billion Per Year To Pay Off Interest Bill

Victorians are facing a daily interest bill of $25.6 million, Mr. Rowswell added. At the same time, the government is spending $5.1 billion annually on programmes in the family centres and housing portfolio, and $9.4 billion a year to pay for the interest debt that has “ratcheted up over the last 10 years.”

“If Labor hadn’t created so much debt by their irresponsible spending, they could have scrapped stamp duty entirely,” Mr. Rowswell noted.

“Instead, they need that $9 billion a year to just pay back the interest payments on their debt, not to build anything or fund anything, just to repay interest, that is now almost $26 million a day.

“Imagine what that would do for first home buyers and downsizes, but thanks to labor and their near $200 billion debt, they can’t scrap it, they can’t consider scrapping it.”

The $26 million interest bill could instead pay for 128 ambulances, two breast cancer centres, 2,715 elective surgeries, or the annual salary of 315 nurses, 510 police recruits, or 305 paramedics every day, the shadow treasurer noted.

Mr. Rowswell also called on the government to reign in its “infrastructure binge,” saying it is a key driver behind the soaring debt. This includes pausing the Suburban Rail Loop, a 90 km underground railway line that runs from Cheltenham to Box Hill, connecting Melbourne’s east and southeast, and instead focusing on funding the West Gippsland hospital.

However, the state government has said that the railway would “ease demand on the existing transport network and shift more people out of their cars and off local roads” as well as create up to 20,000 jobs during construction.

The opposition has promised it would support businesses, “roll out more red carpet and less red tape to investors” make housing more affordable and introduce a debt cap, and resonate a productivity commission if elected in 2026.