Despite the tough talk, spending is on agenda

Victoria's Budget documents lay into the previous government's spending profligacy.

They point out that spending has outpaced state product for many years and that it needs to be pulled back.

Fair enough.  But the facts undermine the government's spin that this is a tough Budget.

State Government debt as a share of the state's output will continue to rise, in spite of some optimistic revenue projections.  The Baillieu Government might be winding back some of the Brumby Government's waste, but the Budget documents show that, inflation adjusted, next year's spending is actually set to increase.

Central to the government's professed toughness is a 4200 reduction in the number of public servants.  But this amounts to just 1.3 per cent of the government's 334,000 employees and follows an increase of 13 per cent in the past three years.

Although in office for little more than a year, the current government is already finding new and creative ways to spend our money.

Symptomatic of this is the $58 million the Government is to spend on helping the manufacturing industry raise its productivity.  This sort of ''I'm from the government and I'm here to help you'' approach is all the more unbelievable in view of the government's obvious inefficiency in running its own operations.

In opposition, the Baillieu team roasted Bracks/Brumby over their wasteful spending on water.  That spending and a host of regulations stemmed from the ALP's spineless refusal to contemplate building a new dam.  It may not now be possible to close the Wonthaggi white elephant desalination plant.  But rather than avoiding new spending, Water Minister Peter Walsh last year hand-picked members for an inquiry to examine ''strategic priorities'' for water delivery.

The inquiry members' backgrounds made it predictable that the report's recommendations would be framed in the context that climate change, contrary to all the evidence, means permanent drought.

Repeating the ALP Government's litanies, the report includes calls for ''smarter'' water use such as recycling stormwater, even though studies show that this delivers little water and at high cost.

Naively, Minister Ryan has established a new bureaucracy, the Office of Living Victoria, with plans to introduce new regulations for stormwater harvesting and ''to improve the performance of new buildings''.  These measures also camouflage tax increases on water — a levy ''to promote sustainable water management'' plus an increased Melbourne Water Corporation dividend paid for by consumers.

The Budget does show modest progress towards reorienting spending into supportive directions.  For example, transport infrastructure spending is reprioritised away from rail to road, on which 95 per cent of journeys are made.  And it reallocates training funding into areas that add productive skills.

But disturbingly government spokesmen have been defensive and apologetic about the modest cuts that have been made in the Budget.

This is unfortunate since and the Baillieu Government has not yet repaired the imbalances that it inherited and governments generally consider they need populist big-spending proposals to take to elections.

ADVERTISEMENT