Victoria's financial position 'unsustainable'
An interim report prepared by the advisory committee to the Victorian Coalition Government, chaired by Michael Vertigan, has found that Federal Government funding, including stimulus spending and grants through Infrastructure Australia, has obscured the state’s true financial position, and that Victoria is currently financilly “unsustainable in the medium term”.
The committee, which also includes former Secretary of the Tasmanian Department of Treasury and Finance, Don Challen, and economist Professor Ian Harper, was appointed in January this year to undertake an independent review of Victoria’s state finances.
Key findings of the interim report, which will be used to advise the forthcoming state budget, include:
- Victoria’s current financial position is unsustainable into the medium term;
- Trend growth in expenses has outpaced trend revenue over the past decade; this has been obscured by the accounting treatment of the significant additional Commonwealth-sourced revenue received for specific infrastructure programs;
- On the current trajectory, the level of net infrastructure investment is insufficient to deliver high quality public services to Victoria into the medium and longer term; and
- Victoria’s stock of debt has risen markedly over the past three years.
The Review Panel relied on data contained in the 2010-11 Budget Update and the 2010-11 Mid-Year Financial Report to prepare its interim report. Its final report is due in February 2012.
The interim report is available at www.dtf.vic.gov.au