Victoria's treasurer plans to take a post-wartime approach to getting the state economy moving again in the aftermath of the coronavirus pandemic.
Subscribe now for unlimited access.
or signup to continue reading
Tim Pallas revealed Victoria recorded a $773 million deficit for the first nine months of 2019/20, as it ramped up spending on virus support measures at the tail end of that period.
The result, laid out in a March quarter financial report released on Friday, is an improvement on the $1.1 billion deficit Victoria recorded in the first six months of the financial year.
But it's short of the progress needed for Victoria to hit its previously-budgeted surplus of $618 million for the year.
Mr Pallas stressed the government had been on track to reach that surplus before it was forced to grapple with bushfires and the coronavirus crisis.
Surpluses are now the last thing from its mind.
"We're not chasing surpluses and we won't deliver a surplus in this year's budget, let me be very clear," he told reporters.
"But what we will do is put a surplus of effort into looking after the welfare of Victorians."
The government's revenue from stamp duty didn't drop substantially in the March quarter, due to the lag of up to three months in the cash hitting its coffers after people buy a home.
But there has been less GST revenue available as consumption has moderated.
The January bushfires are estimated to have shaved $500 million - or 0.1 per cent - off Victoria's gross state product, or output.
The government has also spent more than $5 billion on responding to the COVID-19 pandemic, some of which was rolled out at the end of March.
The final state budget will be produced in October or November and the treasurer has warned the situation could worsen as the government continues spending to ensure Victorians' wellbeing.
On the other side of the health crisis, he will be taking cues from how jurisdictions recovered after World War II.
"What the strategy was then and what the strategy should be going forward, is you grow the size of your economy so you effectively get a much greater capacity to repay both debt and you repair your budget position quicker," he said.
One of Victoria's biggest economic drivers, population growth, will be restrained, so Mr Pallas said he will have to rely on its other growth levers.
That means helping people back into the jobs market as quickly as possible to boost productivity.
The treasurer doesn't intend to increase the tax burden on the community.
But the government is considering who has been hardest-hit by COVID-19, and who has benefited - such as internet providers and supermarkets.
The state opposition has laid out a wide-ranging plan that it says will put Victorians back to work and support businesses, including measures it has been spruiking in the last few weeks.
They include ruling out new taxes, freezing council rates, waiving fees and charges for businesses to July 2021 and a $1 billion fund to reboot manufacturing.
"This is not a plan for the next election, because Victorians can't afford to wait that long," Opposition Leader Michael O'Brien said.
Australian Associated Press
