The following is an amended version of an article from today’s Australian Financial Review. A link to the original article is accessible at the end of this post.
Analysis by the Institute of Public Affairs covered in today’s Australian Financial Review showed state net debt would triple by 2023-24 to fund infrastructure projects and higher public sector wages, which the free market think tank labelled “unnecessarily large”.
“Governments are spending as much money as they can and taking on more debt under the guise of fiscal stimulus needed to recover from the lockdown-induced COVID recession,” IPA Research Fellow Cian Hussey said.
“State governments are pushing the costs of this massive debt onto future generations, who don’t have a voice.”
Mr Hussey said governments at all levels assumed to some degree interest rates would remain subdued and warned rises could add billions of dollars in interest payments over in the second half of the decade.
Net debt in Victoria is set to almost double from $44.3 billion last year to an estimated $77.5 billion this year, before reaching $156 billion by 2024-25, making it Australia’s most indebted state as a percentage of GSP.
Mr Hussey accused the Andrews government of “burying the true state of the state’s finances by taking on a massive expansion in debt”.
The full Australian Financial Review article is available here.