Can the budget lull sleepless Victorian voters as cost of living rises?

Treasurer Jaclyn Symes admits she wishes Victoria's debt were lower. (AAP Image: Joel Carrett) Link copiedShareShare articleMaybe you wake up in the middle of the night, worried about your mortgage. Maybe, like one texter to 774 ABC Melbourne, you "live pay cheque to pay cheque". So, does the Victorian treasurer wake up worried about the state's debt? "That's a great question. I have a lot of sleepless nights," Jaclyn Symes said. For the first time since COVID, Victoria is spending less than it earns. But that's if you count what's called an "operating surplus". Add spending on big projects and building new schools, and each year the budget is in the red. Add up all those annual deficits, and the bill on the debt is mounting rapidly. When Labor was last elected in 2022, the debt cost, or the annual interest bill, was $4 billion. It's already doubled and will triple to $11.8 billion by the end of the decade. That's more than enough to keep a treasurer up at night. It means that one dollar in every 10 spent by the Victorian government will not go towards police or hospitals. It will instead be used to pay off debt. Over 12 years, the Coalition and many media figures have tried to turn debt into an electoral weapon to use against Labor. The Coalition is hoping that debt will finally change votes, and the government is worried it could. However, that "operating surplus" in the budget is not aimed at voters as much as it is aimed at the ratings agencies that set the price of debt. "I'm hoping [the operating surplus] gets us through the ratings agencies," one senior government figure told me. There are voters furious with this government. And Labor's poll numbers are poor — lower than at the last election. There are good reasons why a listener like Sue texts 774 to say: "OMG, please don't stop the handouts, we are hurting!" The state budget landed on the same day the Reserve Bank once again jacked up interest rates. It means that since Christmas, homeowners are paying $272 extra per month on a $600,000 mortgage. It's one reason the treasurer's budget will give back each household $176 on their car rego. If you add in the discounts on public transport in Victoria, then maybe the state government will have given voters what the Reserve Bank has taken away. Victorians are being offered free public transport to help with rising cost-of-living pressures. (AAP: Tracey Nearmy) It's exactly what keeps voters awake or sends them to sleep in tears. Rod rang in from Cranbourne to say: "I had my daughter in tears last night after hearing the interest rates going up … she could lose her house." However, handouts like the rego rebate are exactly what worries Reserve Bank Governor Michele Bullock. Such handouts made it "harder to dampen demand", she said. In central bank language, she is saying the handouts lead to inflation, which leads to another rate hike, which could cancel out the handout. Voters are not just angry at politicians; they're angry at institutions like the Reserve Bank. Michele Bullock also sounds like someone who is not sleeping well. RBA governor Michele Bullock says initiatives being offered by the Victorian government could feed inflation. (ABC News: Nick Haggarty) The bank thinks it has no choice but to raise rates. "We are poorer, and there is no way out of that," Bullock said, "and the trade-off is much worse." But to some, it feels like needless punishment. Deb, who is a mortgage broker in the Macedon Ranges, told 774: "Everyone, your average battler, medium income family, they're struggling week to week." When asked, "Do you think the Reserve Bank understands that?" Deb answered, "No, I don't." If treasurers, Reserve Bank governors and voters are having sleepless nights, can the Liberals turn that into an electoral victory? The Liberal Party has won only one state election in the past 30 years. Jess Wilson is a first-term MP. She is both shadow treasurer and opposition leader, and she leads a party with a poor track record of being nice to each other. She has her fair share of sleepless nights. If she wants to wield debt as a political weapon, she has to convince voters she has a plan. Opposition leader Jess Wilson campaigning with Anthony Marsh during the Nepean by-election. (ABC News) She's made some announcements, but none can be shown to significantly rein in spending, let alone pay down a big chunk of debt. Wilson says voters are "looking for politicians to stop spinning their way out of the mess that they have created". The Liberals have held contradictory positions on the state's biggest project. The Coalition opposes the $35 billion Suburban Rail Loop (SRL), but it's not clear whether its multiple contracts can be stopped. About $7 billion has already been spent, and tunnelling will have begun before the election. Wilson plans to pause the SRL, but will that end up costing billions more? "We will do the responsible and commonsense thing by the tax

Can the budget lull sleepless Victorian voters as cost of living rises?

Key takeaways

Also covered by

Can the budget lull sleepless Victorian voters as cost of living rises?

Key takeaways

Also covered by

More in international