December 9, 2022

Victoria’s major parties look to contingency funds as part of election commitment costings | Victoria state election 2022

Victoria’s major parties have released the costings of their promises – despite the Coalition initially being unable to quantify the total amount committed and Labor not providing timelines to provide major health and transport projects.

Less than two days out from Saturday’s election, the parties have also revealed they intend to draw on contingency funds – which are usually set aside to cover unforeseen circumstances – in order to prop up the state’s finances and achieve budget surpluses.

The Coalition will also transfer $10.2bn from state’s Future Fund to reduce the state’s debt if elected to government.

Under Labor’s election costings, which were checked by the state’s treasury, a re-elected Andrews government could achieve a budget surplus of about $1bn in 2025-26. This is a year after the Liberals costings have forecast a $2.1bn surplus if the Coalition wins power.

Labor’s costings shows a total of $11.6bn in election promises, of which more than $5bn worth of commitments have no specified timeline over the next five years. These include up to $1.05bn to build a new hospital in the Melbourne’s south east, a $44m investment in PET scanners and $650m for improved train services in Melton and Melbourne’s west.

The Victorian treasurer, Tim Pallas, stressed that some of Labor’s hospital commitments could not be built “in five minutes.”

“The government will go about it diligently and consistently and it will get delivered like everything else,’ he told reporters.

But Pallas stressed that the initiatives would be spent in the forward estimates.

Labor has also ruled out any new taxes to pay for its election commitments. If re-elected, it said it will pay for its election commitments through a number of efficiencies, including by reducing labor hire and consultant costs by $200m by 2026-27.

Under the Coalition’s costings – prepared by the state’s parliamentary budget office, the key election pledge to shelve the Suburban Rail Loop is estimated to increase Victoria’s budget by $10.2bn.

When offset against hospital spending, health funding and measures to help halve the state’s elective surgery waitlist, $3.1bn would be leftover, which will be allocated to the health system.

The opposition’s treasury spokesperson, David Davis, said a Coalition government would work to improve Victoria’s debt position.

“The state needs a proper focus on the things that matter for Victorians and that is our health system,” he said.

During a press conference on Thursday, Davis said he was unable to provide the total cost of the Coalition’s spending commitments – which reached about $28bn.

The opposition’s costings said that drawing from the $102bn Future Fund would save $775m in interest repayments over the next four years.

The Coalition also pledged to bring net debt $10.4bn lower than a re-elected Labor government by 2025-26.

Labor’s costings did not outline the total cost of the Suburban Rail Loop, amid reports federal Liberal MP Michael Sukkar would refer the project to the commonwealth parliamentary budget office. The premier, Daniel Andrews, criticised Sukkar over the move.

“That is all I really need to say about the Liberal party … they’re cancelling it, they’re cutting it,” Andrews said.

Victoria’s parliamentary budget office has costed the first two stages of the project at $125bn.

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