BUDGET REPLY

Victorians deserve better than this budget because this was not
the budget they voted for.
Before the election the then-Leader of the Opposition moved
around Victoria in a roadshow with a new haircut, new glasses,
new clothes and a series of slick promises.
It was almost reminiscent of 1950s Elvis.
All that was missing was a shaking of the hips.
He was going to boost infrastructure.
He was going to boost jobs.
He was going to protect the finances.
He certainly was not going to increase taxes.
But come the first budget of this Andrews Labor Government
and it is all too clear; Daniel Andrews may have campaigned
like 50s Elvis but he is governing like Elvis in Vegas.
Abnd just like those Vegas shows, a few rhinestones cant hide
the fact that this is a disappointing, bloated performance; one
that that only makes people remember what was once
promised and how the reality is so very different.
Because this is a budget of broken promises.
A budget that weakens our great State and reduces the
economic security of Victorian families.
A budget that slashes the surplus, trashes infrastructure and
smashes Victorian families with higher taxes and charges.
A budget that lays bare this Governments financial
incompetence and in some cases dishonesty.
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For a budget that Labor trumpets as being for families, it is

clear that Labors union brothers are the only family that counts.
This is a budget handed down by a former union official for the
benefit of current union officials.
I suppose that is this Treasurers definition of intergenerational
equity.
Budgeting is supposed to be about laying out a plan for the
future.
But spending more of other peoples money is not a financial
plan.
Paying to not build roads is not a transport plan.
Imposing new property taxes is not a housing affordability plan.
Cutting funding to police is not a community safety plan.

Every budget has ups and downs.

In Labors first budget, debt is up. Taxes are up. Inflation is up.
Expenditure growth is up. Fire Services Property Levy is up.
And unemployment is up.
But the surplus is down. Economic growth is down. And
infrastructure spending is down.
Labor has done something remarkable; in just over 20 weeks of
government they have brought down a budget where on
practically every single financial and economic indicator,
Victoria is in a worse position than was the case under the
Coalition.

Surplus
We have heard so much rhetoric from Labor this week about
keeping their promises. So how do these claims stack up?
Lets start with the budget surplus.
Remember that when the Coalition was elected in 2010,
Victorias budget faced a structural deficit after a decade of
expenditure increases outstripping revenue. The Coalition
worked hard to restore Victorias finances and we warned that
Labor couldnt be trusted with money.
But the then-Opposition was very quick to assure Victorians
that the leopard really had changed its spots.
Here is Daniel Andrews in the Herald Sun on 19 November
2014:
we have no intention of changing the surplus profile
outlined in the pre-election Budget update.
Here is Tim Pallas on 27 November 2014 on 774 ABC Drive:
our commitments will have no impact on the projected
budget surplus throughout the four years of the forward
estimates
- The surplus profile outlined in the Pre-Election Budget
Update released independently by the Department of
Treasury and Finance during the election campaign stated
that Victoria was set for surpluses each and every year
totalling $9.1 billion to 2017-18.
- Those surpluses protect Victoria; not just from external
shocks, they protect Victorian families from the state going
into debt to pay for infrastructure.
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- Did Labor keep their promise to maintain those surpluses?

- Of course not. Under Labor, the surplus profile in the Budget
over the same period is not $9.1 billion. It is now just $4.9
billion a loss of $4.2 billion.
- Losing over $4 billion in less than 6 months has to be a new
record of budget destruction, even for the Labor Party in this
state.
- Premier, Treasurer. You made a solemn promise to
Victorians. You broke that promise.
- Now, the budget surplus for the next financial year is just
$1.2 billion. But what is worse, is that even the $1.2 billion
relies on an extraordinary proposition. And its this.
- Labors $1.2 billion surplus prediction rests entirely on the
hope that $1.9 billion in East West Link funding from the
Federal Government wont have to be paid back.
- Labors surplus strategy depends on taking money from the
Federal Government for EWL dumping the project and
then not giving the money back.
- If you tried the same thing on eBay, theyd call in the cops.
But Daniel Andrews calls it Modern Labor Government.
This is a phoney surplus from a phoney Treasurer.

Debt
Lets look at debt.
In PEBU, the last year of the forward estimates was 2017-18
and the ratio of State debt to gross state product was 4.5%.
In Labors budget, debt to GSP in that year is now 4.6%.
And what Labor has buried in the Budget papers is that they
have made a policy decision to change Victorias debt strategy.
It used to be that the strategy was:
General government net debt reduced as a percentage of
GSP over the decade to 2022.
This was under the Coalition, and it was similar to the policy of
the Bracks/Brumby governments.
But in this Budget, we see a new debt strategy (p14 of BP2):
General government net debt as a percentage of GSP to
be maintained at a sustainable level over the mediumterm
Do you notice what is missing? There is no longer any
commitment to reduce net debt under Labor.

Unemployment
Victorians remember all the claims that Labor made about jobs
before the election.
Labor said they had a jobs plan. But we know that it was only
really a jobs brochure.
Well in this budget we see the assessment of that jobs plan
which is that under Labor, unemployment will be higher for
longer than under the Coalition.
Forecast unemployment is 25 basis points higher in 2016-17
and 50 basis points higher in 17-18.
These arent just statistics. These are real Victorian families
who wont have a job because of Labors economic
mismanagement.
But should we be surprised that unemployment will be higher
for longer under Labor when we see what this government has
done to businesses since coming to office?
- 2 new public holidays
- Abolition of the Construction Code Compliance Unit
- And scrapping 3700 jobs on the shovel-ready East West
Link while slashing infrastructure spending in this Budget.

Economic growth
Under Labor, Victorias economy is growing slower than under
the Coalition. GSP growth is down by 25 points in 2014-15 and
down by 25 points in 2015-16.

But inflation is forecast to increase, hitting Victorians with the

triple whammy of higher cost of living, higher unemployment
and lower growth.
Taxes
Now to taxes. Labors favourite topic.
Because theres nothing that Labor like more than taxing
Victorians.
And Treasurer Pallas has secured a place in history: he is
clearly the highest taxing Treasurer in this states history.
More than $1.1 billion in extra taxes in this budget alone.
Of course, Victorians were made promises from both the thenOpposition Leader and the then-Shadow Treasurer that they
would not introduce any new taxes, charges, fees or levies or
increase any of them beyond inflation.
Here is Mr Pallas on 774 ABC on 27 November 2014:
our election commitments will not lead to an increase in
debt, our commitments will have no impact on the
projected budget surplus throughout the four years of the
forward estimates and we will introduce no new taxes.
Source: Tim Pallas, 774ABC Drive, 27 November 2014
And in this first budget, Treasurer Pallas introduces not one,
but two new property taxes an extra land transfer duty and an
extra land tax.
2 new taxes. 2 broken promises.

And this Treasurer then has the hide to say he wants to

promote housing affordability!
The former Coalition Government released more land to meet
demand.
The former Coalition Government halved stamp duty for first
home buyers.
That is how you promote housing affordability; not introducing
new property taxes.

Infrastructure
Infrastructure investment is down by $6.4b over 4 years,
compared to PEBU.
That is $6.4 billion worth of work Labor has ended.
That is $6.4 billion worth of jobs, Labor has destroyed.
Projects cancelled inc. EWL 1 and 2, Melb Rail Link, Airport
Rail Link. Labor will leave Victorians stuck in traffic for longer,
hurting productivity and damaging the quality of life of our
citizens.
Labor is so desperate it is now trying to claim credit for the
Citylink-Tulla Widening project; a project agreement signed by
the former Coalition Government.
Maybe Labor thinks that any contract of the former Government
they dont rip up counts as their project.
Of the road projects Labor did take to the election, most are
unfunded in this budget.
- Thompsons Rd ($175m)
Yan Yean Rd ($95m)
Napier Street, Bendigo ($17.2m)
And of course, there is one semi-major road project that Labor
did take to the election, that Labor did seek a mandate for the
West Gate Distributor. And who even knows iof that is going
ahead? Certainly the Premier and the Roads Minister seem to
be completely at odds.

Business case Western Distributor

That brings me to another road project that hangs like a
shadow over this budget.
Here is Daniel Andrews in the Financial Review on 10
November 2014:
Its a project without a business case, its a project without a
mandate.
Do you remember those days? When Labor used to say that
business cases were essential and mandates were
indispensable?
Like some member of the Kardashian family, this Premier
has simply decided that mandates are out of fashion, that
business cases are so 2014 they just dont matter anymore.
Having ditched the East West Link and with no major shovelready road projects, he has now embraced a secret proposal
by Transurban to build a pale imitation of the East West Links
second stage.
He now wants to sign Victorians up to a project he never
mentioned before the election at a cost of $5.5 billion with no
business case.
Well Premier, thats not what you promised Victorians.
And this Premiers broken promise condemns him as a
hypocrite of the highest order.
Worse, he wants everyone else to pay for this toll road except
him.
The Premier is sending invoices to the Prime Minister.

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Not only does the Premier demand the motorists of

Melbournes east and south-east pay for a western suburbs
trucking tunnel they wont use but by extending CityLink tolls
out to 2050, he wants the children of those motorists to pay as
well.
But he wont put in one red cent of his own.
What a fraud.

Mernda Rail
What we now know is that when the Premier says he has no
respect for Greens, hes actually referring to the Member for
Yan Yean.
Why else would he not only exclude her from the Ministry, but
also turn her promise to build the Mernda Rail extension during
2015 into a fraud.
How does Labor expect to build a train line costing $600 to
$700 million for just $9 million? Who is going to tender for that
contract? Tonka or Lego?
The people of Yan Yean, the people of the City of Whittlesea,
have been conned by this Labor Government and they will not
forget this Mernda Rail betrayal.

50 Level Crossings
Of Labors promise to remove 50 level crossings, all that you
can say is that Labor has delayed removing the 8 level
crossings fully funded in the Coalitions last budget and has not
allocated money to remove any of its own.
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Health
No action of this Andrews Labor government could better
demonstrate its determination to put politics ahead of people
than its disgraceful attack on the Peter MacCallum Cancer
Centre.
To cause the loss of $20 million in philanthropic funding, to
cause the loss of 41 cancer beds and to undermine the
financial planning of one of our most important cancer
treatment centres is outrageous.
To do so in the pursuit of outdated socialist ideology a hatred
of private medical practice co-locating with public health - is
nothing less than a disgrace.
But given the Premiers track record as Health Minister in the
Brumby Government, perhaps we should not be surprised.
This Budget has some serious failures in health. It:
completely fails to fund the Maroondah Breast Cancer
Centre and Aikenhead Centre for Medical Discovery;
provides only 10 per cent of funding for the Victorian Heart
Hospital that the Government has promised to have open
by 2018;
funds less than 2.5 per cent of the cost of the expansion of
Casey Hospital; and
cuts 20% of funding from the Dental concessions.
In addition, 94% of the hospital beds identified by this
governments Travis Review remain unfunded.

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Education
The Treasurer claimed in his speech that this is the biggest
education budget in Victorias history.
We know that is the sort of cheap rhetoric this government likes
to put on number plates, so lets have a look at the facts.
In this budget, the Andrews Government pats itself on the back
because it announced funding for 10 new schools.
But how many new schools did the former Coalition
government fund last year? The answer is 13!
And even where the Coalition delivered funding last year to
build a much needed new school such as Prahran Secondary
College, Labor has now dropped the ball and failed to get this
school up and running in the interests of Stonnington families.
Labor has also let the community down in South Melbourne,
failing to progress the investment and work undertaken for the
new primary school at Ferrars Street.
And of those schools that do receive an upgrade in this budget,
it is telling that around two-thirds of them are in Labor-held
electorates despite Labor only holding 53% of the seats in this
chamber.
Yet again, under a Labor government, electoral margin rather
than educational merit counts for more.
Victorian state schools well remember the $420 million
maintenance backlog Labor left last time they were in office.
This budget sends the message that Labors neglect of the
school basics will be repeated yet again with underinvestment
in maintenance and less than half of the promised funding for
asbestos removal being delivered.
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But it isnt only state schools that have cause for concern.
Of the $120 million committed to infrastructure for Catholic and
Independent schools, a paltry $10 million or 8.3% has been
funded in 2015-16
And while Labor ducks and weaves on whether it will honour
the final two years of Victorias commitment to the Gonski
initiative, no school can be confident that its future funding will
be secure.
And Labor as the party that closed down this states technical
schools in the 1980s has provided practically peanuts in this
budget, ensuring that Victoria remains many years away from
any tech school opening its doors.

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POLICE
Under the Coalition, more than 1900 additional Victoria Police
officers were recruited together with 950 Protective Services
Officers.
These are the PSOs Labor disparages. These are the PSOs
the current Deputy Premier of Victoria insulted by branding
them plastic police.
The same PSOs who protect this very Parliament and keep us
safe from harm.
Labors budget offers no additional police and no additional
PSOs. Not one.
This is completely inadequate for a state growing by around
100,000 people every year.
Worse, Labors financial mismanagement is cutting $23.8
million from the police operational budget to pay for a black
hole in Labors poorly costed country police radio policy.
This Government cannot talk with credibility about Victorian
families while at the same time failing to recruit additional police
and ripping off the police budget the fix their own financial
blunders.

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Rural and Regional

True to form, in this budget Labor ignores most of Victoria thats
beyond the tram tracks.
If you dont live near a graffiti covered inner-city laneway, this
Labor government thinks that youre just camping out.
And how have they shown their lack of concern? In the
traditional Labor way.
Budget cuts.
Budget cuts to country road funding; cuts to agriculture; cuts to
regional tourism; cuts to the country roads and bridges program
and short-changing country Victoria through abolishing the
Coalitions $1 billion Regional Growth Fund.

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PT
- Trashed Melbourne Rail Link and Airport Rail Link
- Metro Rail: no business case, no funding,
no tick from Infrastructure Victoria,
No Fed funding; no private funding.
- Wheres the $$$ coming from?
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- Train and tram procurement policy they should pay

copyright fees to the Member for Polwarth and the
Member for South West Coast.
- Announcing a 10-year procurement program for trains and
trams was something Labor had never conceived, let
alone mentioned until the former Coalition government
announced it during the last election.
- If imitation is the sincerest form of flattery and thats
probably the only type of flattery that the current Public
Transport Minister is capable of when it comes to this side
of the House - the former Premier and Minister for Public
Transport have been flattered indeed.

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Problem gambling
Funding has been cut in this budget to the Victorian
Responsible Gambling Foundation; not only a cut in real terms
but even a cut in nominal terms.
What a mean and indefensible budget measure that is. One
that affects some of the most vulnerable people in our
community.
And this from a Premier who couldnt stop telling us in his ads
before the election that he was all about putting people first.
Which people benefit from cuts to problem gambling funding,
Premier?

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Conclusion
This is not a budget for families. This is a budget of broken
promises.
This is a bad news budget. For Victorians looking for work, for
Victorians stuck in traffic, for Victorians worried about their cost
of living, this budget doesnt help, it hurts.
There is only one good thing about this budget; it means we are
one budget closer to the return of good financial management
under a Coalition government.

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