How Victorians will pay for the ‘ambitious’ state budget
The state will be plunged into a peak debt of almost $155 billion by 2024 as the Andrews government seeks to spend the state out of the COVID-19 crisis.
The Victorian budget, which was handed down yesterday, includes $140 billion of capital spending which is already under way or due to begin this financial year.
Partner at accounting and business advisory firm, Pitcher Partners, Craig Whatman, said it’s an “ambitious” budget.
“I think they’ve definitely gone very hard,” he told Ross and Russel.
“It’s an ambitious budget … clearly it’s a budget that’s aimed at getting Victorians back to work.”
While there is some tax relief in the 2020/2021 budget, Mr Whatman says that won’t continue in future budgets, to pay for the mammoth cash injection.
“Tax revenue is going to be a very significant feature going forward. Although there’s some tax relief in this budget … if you look at the projections for tax revenue, it is going to go back to a trajectory of increasing over time and that will be needed to repay the debt,’ he said.
“It’s going to be repaid over generations well beyond my and your lifetime.”
Mr Whatman predicts land tax hikes will contribute significantly to repaying the debt.
“Obviously they are banking on land transfer duty heading back into the right direction once we’re out of the lockdown and everybody starts buying property again,” he said.
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