Budget In Reply 2025

Mr NEWBURY (Brighton) (19:18):

Victoria needs change. Our State has slipped. We were once the place to be. We had the most livable city. Now we are the highest taxed State with the biggest level of debt. We have become the run-down State. Businesses are closing, and the only sure thing is that when you put your hand into your pocket Premier Jacinta Allan’s hand will already be in there.

For the first time since Federation, we are now a welfare State. Government now relies not only on taxing Victorians but on holding out our begging bowl and taking a share of tax from other States. And we might pay more than everywhere else, but we get less for it.

It is time to fix this State. Today, in response to the Budget, we will be announcing our economic plan to fix it. Our ‘Go for Growth’ economic plan will get Victoria moving again.

We have already committed to scrapping four taxes: the Emergency Services Tax, the Schools’ Tax on non-government and religious schools, the Health Tax on GPs and allied health professionals, and the Tax on Holiday and Tourism. And today we will announce a commitment to scrap a fifth tax.

Our four-stage plan will scrap taxes, drive growth and open a pathway to pay down debt. Our plan will deliver the fresh start this State deserves. It is time to stop Victoria’s slide.

As the Chief Executive Officer of the National Australia Bank Andrew Irvine recently said:

On every measure … Victoria does a little bit worse.

He is right. Last year inflation in Melbourne was above the national average, and so too was unemployment. The recent State Budget confirmed that slide would continue with no plan to fix it. At the same time as our economy slides the Government keeps spending too much and remains addicted to tax. Total expenses in last year’s Budget update were expected to grow by just 0.2 per cent in the coming year, but they have blown out by $8.2 billion. That is 41 times the growth forecast.

State Labor’s addiction to tax is well above any other State. Next year the Government will claw in $41.7 billion and then expand that by an average of 4.75 per cent per year over the forward estimates. Tax is up by 183 per cent since Labor was elected, but our incomes have only gone up by 38.5 per cent over the same time, whilst inflation has hit us by 32 per cent. Costs are going up, but the Government keeps taking. That is why our wallets are hurting. That is why the Liberal–National Coalition has announced we will put $3 billion back into the pockets of Victorians. Costs are too high, and taxes are too high, and we are committed to making things easier.

The Emergency Services Tax is unfair and a direct assault on Victorians – a tax the Treasurer said Victorians can afford to pay. Well, the Treasurer and her Labor mates are wrong. As Garth Head, an emergency volunteer awareness campaigner, said:

… it’s really just a sneaky new tax sold on the backs –

Members interjecting.

The SPEAKER: Order! Minister for Finance!

James NEWBURY: And they are laughing.

He said:

… it’s really just a sneaky new tax sold on the backs of the reputation of our dedicated volunteer and career fire and emergency workers.

Since Labor rammed the tax through the Parliament, we have seen the unprecedented step of hundreds of Country Fire Authority volunteers going offline.

Their message is simple: they are at breaking point and this tax will push them over the edge. As Cara, a Brigade Captain, recently said to me:

Even the strongest communities have limits. The mental and emotional toll this is taking, especially on our farmers, who are already facing so much, is quite devastating.

So, on behalf of the Liberal–National Coalition we have a message for you, Cara, and we have a message for every hardworking volunteer, every homeowner and commercial property owner hit by this tax and every Victorian: we will scrap Labor’s unfair tax, and we will put $3 billion back into Victorians’ pockets. We have a plan to do more than just deliver cost-of-living relief; we have a plan to get Victoria moving again: the Liberal–National Coalition economic ‘Go for growth’ plan – a plan that delivers tax cuts, because tax cuts will drive growth.

In assessing the State Budget, the credit rating agencies’ sharp assessment was that our State lacks budget integrity.

Moody’s rating agency has called on the Government to improve financial transparency and accountability and strengthen financial oversight. Recent analysis of the last 10 years of budgeting has exposed Labor’s deception. The Budget has blown out by $129 billion between the amount they budgeted for and the amount that was spent. On average that represents a $14 billion blowout each and every year. On top of that, capital spending has ballooned out by 18 per cent each year, and operating expense growth has averaged around 7.2 per cent. Labor has simply forgotten that every dollar taxed by this government was first earned through the hard work and sweat of a Victorian.

No-one should believe that a Labor Government can deliver their promised $600 million surplus – it is phoney. The only thing that Labor can deliver for $600 million is to not host the Commonwealth Games. Labor cannot manage money.

As Moody’s also said:

Moderating expenditure growth may prove difficult, given expenses grew at an estimated 5.5 per cent per annum …

With no control of spending and a Budget full of figures that cannot be believed, our credit rating is at further risk. We have already been downgraded to the lowest rating of any State, but unless we better manage our Budget it will get worse. Any worsened rating will immediately wipe away any promise of a surplus.

As Standard & Poor’s recently warned:

If Victoria pushes ahead with the Suburban Rail Loop without additional federal government funding, the state’s fiscal outlook may weaken, further eroding its credit standing …

The best pathway to a strong Victorian economy is to responsibly manage the State Budget, and the best way to safeguard our credit rating is to Budget with integrity.

Instead, we have a Treasurer who had no real depth in her first Budget, who is now forced to head on a taxpayer-funded trip to New York to personally beg the credit rating agencies not to downgrade us again.

In contrast to this Government, our ‘Go for Growth’ four-stage economic plan will start with a commitment to restoring financial integrity. That commitment to financial integrity will be based on the principles of integrity, certainty and confidence – integrity in budgeting, certainty in future policy and confidence for the world at large that we want you to be part of the future of our State.

With those principles underpinning a commitment to financial integrity, the pathway to economic prosperity will follow – economic prosperity where a sustainable operating surplus is real and economic prosperity that delivers a pathway to pay down Labor’s ticking debt bomb, because when our debt hits almost $200 billion, our interest payments will reach $1.2 million per hour. That interest will represent almost 10 per cent of the cost of our entire State Budget. That level of debt is just not sustainable.

Integrity with our Budget will mean stopping Labor’s waste. Under a Liberal– National Coalition Government we will not accept the $48 billion in blowouts to major projects that have occurred under Labor’s watch – $48 billion – or the $216.7 billion Suburban Rail Loop project that we cannot afford, which is why we repeat our calls to stop it, down tools and shut down the project. We will also stop the Treasurer’s slush fund, which following the pandemic, has funnelled $39.9 billion off book into Treasurer’s advances to partly pay for infrastructure costs.

As Government integrity expert Gabrielle Appleby said, Treasurer’s advances
are:

… just a slush fund for the government to use as it will.

It is time for financial integrity, and it is time for the State’s accounts to be reconciled. That is why the Coalition has committed to auditing the books, because Labor’s financial irregularities will be uncovered.

In the private sector the law stops decision-makers from financial recklessness. In this Labor Government it is on every Minister’s CV, and there are no repercussions. No one is ever held accountable, and fair-minded Victorians do scratch their heads and ask why Ministers can be knowingly financially reckless with our taxpayer dollars. And the worst offender is the Premier, who oversaw major project blowouts and chose to ignore what was happening on Government worksites. The real irony is that when the Premier leaves Parliament she will be paid a pension, paid for in perpetuity by the taxpayer.

To protect our State’s financial integrity forever, we have committed to bringing Victoria into line with the Commonwealth and legislating a Charter of Budget Honesty. The Charter will make budget honesty legally binding. It will require future Governments to deliver clear, accurate financial reports. Integrity in reporting will be the best defence to protect taxpayers’ money.

Integrity in reporting is not enough, though. Victorians deserve to know how their money is being spent. That is why we will also publish a real-time online public expenditure tracker. The website will show settled spending decisions in real time.

Restoring financial integrity will also mean certainty of policy. No-one has forgotten the then Treasurer Tim Pallas announcing a surprise new property tax at last year’s budget breakfast. The impact of that surprise tax has been real.

As AMP’s chief economist Shane Oliver recently said,

…some of the things they have done have harmed the State. There were tax levies put on a year ago now, which has seen a lot of property investor activity leave the State.

As the Property Council of Australia has estimated,

Victoria continues to scare away much-needed foreign investment with extensive levies that see investors looking to less punitive States. Property Council research shows that these taxes have cost us 81,000 homes, $93 billion in economic growth and nearly 90,000 local jobs.

Let me say that again: 81,000 homes lost, 93 billion in economic growth turned away and 90,000 local jobs denied.

The Liberal–National Coalition knows that investment will come back if there is certainty. We will make clear that businesses can make decisions with confidence. The rules will be clear, taxes will be lower, and we want your investment in our State.

By contrast, since promising there would be no new taxes, Labor has introduced or increased taxes and charges 61 times. Those 61 increases are in addition to the 33 base taxes charged by the State. Our view as the alternate Government is that there are too many taxes, tax is too high, and tax is stopping growth. Labor is addicted to tax, and their addiction is hurting Victoria.

We have a loud message for the Premier: you cannot tax your way to growth.

Next year the Government will bring in just short of $41.7 billion in tax revenue. In the Budget out years, it will be almost $48 billion. Without a resource sector, Labor has decided that Victorians are the cash cows.

On a State comparison, Victoria leads the nation in tax collection. Victorians are paying more in property taxes than any other State.

As the Commonwealth Grants Commission has found, land tax accounts for 13.4 per cent of Victoria’s revenue but 11.4 per cent in New South Wales and stamp duty accounts for 22.5 per cent of revenue here but 18.5 per cent for our neighbours.

Labor has demonised property owners through tax.

We will break Labor’s cycle of addiction and reduce the tax burden, and we guarantee no new taxes or charges under a Liberal–National Coalition. That is what certainty looks like.

But we need to do more than guarantee not to make things worse; we need to bring confidence back to Victoria too, because confidence has been lost. That is why we have already committed to scrapping four taxes.

Under a future Liberal–National Coalition Government the Emergency Services tax will be scrapped, the Schools Tax on non-government and religious schools will be scrapped, the Health Tax on GPs and allied health professionals will be scrapped, and the Holiday and Tourism Tax will be scrapped.

Today we announce a commitment to scrap a fifth tax.

The Australian dream is a defining feature of this country’s ethos. For Australians, owning your own home is more than a dream. Whether you are new to this country or not, every Australian has a dream to own their own home and be part of our sprawling suburbs and towns.

Home ownership data shows home ownership rates of 67 per cent, down from 70 per cent 20 years ago, but the home ownership rates amongst young people have fallen fast. Amongst 30- to 40-year-olds it has decreased from 64 per cent in the 1970s to 50 per cent in the most recent census data, and for those who are aged 25 to 29 it has fallen from 50 per cent to 36 per cent.

For many young people the dream of home ownership is dead, and it has been Labor who has helped kill it – kill it with tax, kill it with red tape and kill it because they have no interest in fixing it.

No-one should ever forget that it was the former Premier who said:

I’ve talked to my kids and their friends … They are happy to rent …

On behalf of the Liberal–National Coalition I say to every Victorian with a dream of owning their first home: we want to help you. We know it is harder than ever to buy a home. We know that a property costs five times more than the purchasing power of the average salary 50 years ago, and we know that at the centre of these significant costs are greedy Governments. Of the 61 taxes and charges introduced by this government 30 have been on property, which explains why up to 43 per cent of the cost of a home is made up of taxes and charges. Governments have gone from clipping the ticket on property to being the biggest impediment to affordable home ownership, and no Government wants to talk about it because they are all in on the racket.

Despite the housing crisis, we saw no answers from the Government in this Budget, just like we saw no solution to the crisis in the Government’s Housing Statement, a Housing Statement that was nothing more than a masked tax grab – a Statement which promised to build 80,000 homes every year over 10 years. Instead, there was a broken promise in year one, with 60,220 homes built, 25 per cent less than what was promised.

As Linda Allison, the Victorian Chief Executive of the Urban Development Institute of Australia, said:

Industry can’t “magic” homes out of thin air; the conditions have to be right and the numbers have to add up.

We know the conditions are wrong: red tape is stifling, and taxes drown the sector. The foreign purchaser surcharge, windfall gains tax – it goes on. Even the Government’s poorly targeted stamp duty concession has missed the mark.

As Max Shifman, the Immediate Past President of the Institute, has said, the policy has:

… made no difference on the entry level.

And as Richard Temlett, the Executive Director of Property Advisory Firm Charter Keck Cramer, has said:

We’re in a bad hole. The new-housing market has broken down …

We believe in home ownership. We believe in home ownership as strongly as we believe in lower taxes. We believe in helping first home buyers with their dream of home ownership. Victorians who work hard should be able to aspire to buy their own home. That is why we are announcing a game-changing commitment to first home buyers. Under an elected Liberal–National Coalition Government we will scrap stamp duty for first home buyers who purchase their first home property valued up to $1 million – no conditions, no catches, any property, anywhere. The policy will deliver more than 17,000 exemptions in its first full year, helping young Victorians into a home while injecting confidence back into the property sector. Home ownership is about the power of aspiration, and we are the parties of home ownership. These commitments underpin our message that we will bring confidence back to Victoria again.

Despite our natural advantages, Labor has let Victoria slip behind. We were once the economic powerhouse. We were once on the move. We once held the Economist Intelligence Unit’s most liveable city title for six years running. That has all slipped. It has slipped because our private sector cannot thrive.

As the Victorian Chamber of Commerce and Industry said:

Our fiscal position is problematic. This creates a heavy burden of taxation and means Victoria is at risk of losing its competitiveness and attractiveness as a place to do business.

Not only are we not the place to do business anymore, but businesses are closing their doors. Recent data from the Australian Securities and Investments Commission shows that Victorian business insolvencies are, for the first three quarters of the 2024–25 year, higher than the full year prior.

Without a thriving private sector our growth is being impacted. Victoria’s gross state product measured per capita was $84,000 last financial year, compared with $93,000 in both New South Wales and Queensland.

Victoria is also underperforming on employment. This month is the 14th consecutive month that Victoria has recorded the highest or equal-highest unemployment rate of any State. With the Australian Bureau of Statistics having recorded labour force data since February 1978, Victoria’s 14-month weak unemployment is the longest streak on their records.

It was a mistake for this government to move aside the private sector from the centre of the economy and replace it with the public sector. That is what Labor’s taxation and big Government have led to. The biggest repositioning took place during the pandemic, but in infrastructure and housing the Government has crowded out the private sector.

To get Victoria moving again we will reverse that shift. The second stage of our plan will see a future Liberal–National Coalition Government unleash private sector growth and job creation. To turn around those underlying weaknesses we will cut red tape for business and builders, making it easier to build homes and start or expand businesses, creating jobs where they are needed most. We have already announced commitments to removing red tape in planning by shaking up the cultural heritage system, mandating approval timeframes, setting out clear costs, publishing annual audits of approvals, establishing clear timelines and costs and instituting annual performance audits for Melbourne Water in its approval authority role. But we need to go further.

One of the biggest criticisms from business across every single sector is that this Government does not make decisions. It is so bad the private sector would rather invest in another State. That is why we will shake up Business Victoria’s model and establish a single point of contact for investors and businesses, which will mean faster decisions and more jobs. The new point of contact will not simply provide information; we will provide a central point for business to contact Government. For business it will mean an end to the merry-go-round of Government. We will make sure that business has a point of contact which will be accountable and establish timelines and outcomes that will be reported. We will also establish a Victorian Productivity Commission, whose job it will be to drive advice to Government on growing the productivity of our State.

We will successfully reduce public sector delays, and we will accelerate project approvals, because we know that if we can unleash private sector growth, we will see confidence back in this state, and confidence will increase Victoria’s economic output through Gross State Product.

With the private sector and jobs growth refocused, the next stage of our plan will see us supporting Victorian workers and easing the cost of living. We have already committed to scrapping five taxes, including scrapping the emergency services tax, which will put $3 billion dollars back into Victorian pockets, but we need to go further on reducing the burden of the 61 taxes and charges introduced by Labor. That is why we also commit to a review of the 61 taxes and charges, with a further commitment to a pre-election plan on how we can reduce those 61 taxes and charges to support Victorian workers and ease their cost of living – because a reduced tax burden will lead to growth.

Going for growth means seeing industries expand. We have already committed to reversing Labor’s ban on gas, because Victorians have a right to clean, affordable, reliable and secure energy. They also have a right to choice. Labor’s ban on gas in homes is wrong, and we will reverse it. We will also work with industry to turn the gas tap back on. We will kickstart a gas industry. A gas sector which provides reliable energy to the community will also pay their fair share, which will deliver to the Budget bottom line and deliver to the household bottom line too. A gas industry will see cheaper energy costs and cheaper energy bills. Our commitment to growth will see industries that have collapsed under Labor expand. Opening the gas tap will see the gas sector grow. Scrapping stamp duty for first home buyers will see the property sector incentivised, and it will see the housing sector grow. With the education sector being such an important part of our economy, we also need to do more to stop the constant threat of Labor Governments imposing caps on international students. Our economic plan will see Victoria grow.

As industry expands, we will also make sure that we protect workers in the workplace. To protect workers, we will tackle union corruption and misconduct, because what we have seen on government worksites is a disgrace. What has been worse is Labor’s and the Premier’s silence. We will not be silent. That is why we called for a Royal Commission into CFMEU misconduct on Victorian Government projects and we have committed to establishing construction enforcement Victoria to enforce a reinstated code of practice for the building construction industry. We will grow industry and make sure that workplaces are fair and safe, because we know that by doing so, we will see an increase in real disposable income per capital and a boost in workforce participation.

The final stage of our plan will secure Victoria’s future by tackling debt responsibly. Our State debt is about to hit $200 billion. Labor has left us with a ticking debt bomb; we need to defuse it. Soon our debt repayments will consume almost 10 per cent of our State Budget and we will be paying $1.2 million an hour in interest payments, yet last week the Premier refused five times to even admit that debt matters. The word ‘debt’ was not even used in the Government’s Economic Growth Statement. Well, debt does matter, and our level of debt is a ticking time bomb. It must be defused. We believe that the only way out of debt is to grow our State. Growing our State will mean that net debt as a share of the State economy reduces.

We also believe that spending must align with budgeted costs so that debt can be paid down. Labor has no plan for growth, no plan for controlling spending and no plan to pay down debt.

If they were to remain in office, interest would soon crowd out the choices we can make as a State, and that is why their debt is a ticking time bomb. More wasted interest payments will mean less quality services, and we will keep slipping as a State. Well, Victorians deserve better. The structural damage caused by Labor’s debt requires action, and that is why we commit to legislating a debt cap. The debt cap will be based on net debt as a percentage of Gross State Product. We will put into law a cap to protect future generations from dangerous Labor Government spending. Labor wants to ignore the debt, but it is time to accept that not only do we have an economic reason to pay it down, but we also have a moral obligation. That moral obligation is directly linked to one value difference between the two sides of our Chamber: we never forget that every dollar collected by Government was first earned through the hard work and sweat of a taxpayer.

We have a plan to stop our State slipping, to stop us from being the rundown State. Our ‘Go for Growth’ economic plan will get Victoria moving again. Our plan will get Premier Jacinta Allan’s hand out of Victorians’ pockets. It will scrap taxes, restore budget integrity, grow the private sector, support workers, ease the cost of living and tackle Labor’s ticking debt bomb. Victoria needs fixing, and it needs change. With change Victoria can be the place to be again, and under a Battin-led Liberal–National Coalition Government, it will be.