It finds the centrepiece – a pledge to save $22 billion from a public service hiring freeze – simply does not withstand scrutiny.
To deliver the promised savings, the analysis finds the Victorian Liberals would need to halve the public service, which would have substantial flow-on consequences.
Opposition Leader Jess Wilson claims the $22 billion could come from a hiring freeze on back office roles. The analysis describes this as implausible.
The analysis also finds that the Coalition’s vague plans to cut payroll tax, expand stamp duty exemptions and provide land tax relief would be expensive and benefit high income households much more than ordinary Victorians.
Key points:
- Saving $22 billion in public sector job cuts would require the elimination of around 31,700 jobs by 2036-37. There are currently 58,169 public servants in Victoria, excluding statutory authorities, corporations, schools and hospitals.
- This measure has the potential to drive Victoria’s unemployment rate from a projected 4.75% up to 5.4%.
- The alternative, contracting out and using labour hire services, is unnecessarily expensive.
- The analysis describes the Coalition’s vague pledge to “end waste” by scrapping the machete bin program and pot plants for the Suburban Rail Loop Authority as “trivial and is simply lost in rounding errors”.
- There is nothing to support the claim that repealing the Treaty Process and First People’s Assembly would save $1 billion.
- A plan to use windfall revenue to pay down debt is described as “meaningless”.
- The Coalition plan includes significant but uncosted spending, including:
- A pledge to deliver cost of living relief. If the government intervened to save Victorians just 1% of what they currently spend, it would cost between $4 billion and $4.7 billion a year.
- A pledge to cut payroll tax for some private schools would be of most benefit to those sending their children to the most expensive schools in the state.
- A plan to deliver local infrastructure, which hints at diverting money away from major projects, offers no detail, costings or tangible proposals.
“The Opposition plan to bring the budget to surplus by 2032 is not credible. It’s a bit rich to even call it a plan,” said Dr Richard Denniss, co-CEO of The Australia Institute.
“This is a vague collection of dot points, slogans and populist pledges with very little detail. Where they have attempted to put a dollar figure beside the so-called savings, many of the numbers simply don’t add up.
“The plan to save $22 billion through public service job cuts is implausible. To achieve that level of savings, you’d need to slash around 31,700 jobs. That would gut the public service. To claim this could be achieved with a few back office jobs is nonsense.
“The plan also includes additional costs to the budget bottom line. Things like cutting payroll tax for some public schools won’t save those doing it hardest a single cent.
“The Opposition claims it wants to make Victoria the best place to do business but constantly talks the state down, claiming its fiscal position is out of control. The Oxford Economics Global Cities Index ranks Melbourne sixth in the world. Its rankings are based on economics, human capital, quality of life, environment and governance.
“It might make political sense for the Victorian Liberals to talk the state down and exaggerate its so-called economic woes, but it makes no economic sense.
“It’s not all doom and gloom. Victoria’s public sector assets are growing far faster than public debt. When that happens with a private company, it’s share price rises rapidly. Another good measure of Victoria’s progress is government net worth at $40,442 for every Victorian, which is expected to increase by another $3,300 over the forward estimates.”
