Victorian budget hands down biggest cuts since Kennett

May 4, 2012
Ted Baillieu's new budget won't fix any problems

The Victorian Coalition government has taken to the state with a razor and announced huge cuts in the 2012 budget. These are the biggest cuts since the Jeff Kennett-led Coalition government that ruled Victoria from 1992-1999.

Victorian TAFE institutes in particular will be hard hit. The level of cuts was so severe that higher education minister Peter Hall sent a letter to TAFE heads on April 29 indicating that he had considered resigning from the ministry.

The other big story in the Victorian budget is plans to axe an extra 600 public service jobs. Added to the public service job cuts announced in December, this means 4200 public service jobs will go.

However, these figures do not tell the full story. Community and Public Sector Union media officer Julian Kennelly told Green Left Weekly that the non-renewal of fixed-term contract staff is not included in the job cut figures. In some departments, 20% of the staff are on fixed-term contracts. That means the total job cuts may be higher than the 4200 announced.

This will worsen unemployment in Victoria, which is rapidly rising. Victoria already has the highest unemployment (5.8%) of all mainland states.

To reach a budget surplus of $155 million, the government is making the poorest people pay.

Hidden away in the budget announcements is the news that concessions on water bills, energy bills and municipal rates will be cut. These cuts will hit unemployed people on Newstart benefits the hardest, especially as it is considerably lower than the other pensions and people on Newstart will get less carbon tax compensation than pensioners.

This is ironic, given that the Ted Baillieu government was elected on a policy of cutting the cost of living in regards to utilities.

The budget halves the Education Maintenance Allowance and abolishes the School Start Bonus — payments that help families with the high costs of education.

Other cuts include the axing of the first home buyers grant, which will put people buying their first home up to $19,500 out of pocket. Australians for Affordable Housing said in The Age on May 2 that government spending on social housing indicates its intention to cut spending in this area.

Despite high population growth in Victoria, only one new school has been announced in the budget, to be located in Geelong’s northern suburbs.

As well as cuts, the government will use punitive measures to raise funds, such as increasing fines by 12.5%. It expects to rake in $662.5 million in fines next year.

The big spending items in the budget are $690 million for new prison capacity, including a $500 million new prison, and $15 million for planning the East-West tollway link.

Federation of Community Legal Centres spokesperson Hugh de Kretser responded to the prison spending proposal in a news release: “A $500 million commitment to a new prison continues a dangerous trend of ineffective and expensive prison expansion that will fail to prevent crime, tackle its causes, or rehabilitate prisoners so they are less likely to re-offend."

The prison announcement comes as funding for family services, out-of-home care and child protection lags far behind at $366 million compared with the $500 million allocation for a single prison.

The Yarra Campaign for Action on Transport (YCAT) group has formed again to fight the East-West Link proposal in the budget. The proposal was initiated by the former Labor government. Now the Baillieu government says the tollway will stretch from the end of the Eastern Freeway (near Hoddle St) through Fitzroy, Carlton and North Melbourne to the Kensington/Docklands/Footscray area.

The tollway was first proposed as a tunnel, but the government and developers are now reportedly exploring an above ground Citylink-style flyover through these inner-city suburbs, with on- and off-ramps into the city at various unnamed points.

YCAT acknowledges that there is a problem of traffic congestion, but says that could be solved by a rail line being built down the Eastern Freeway. Without that, many people in the eastern suburbs cannot get to work by public transport.

Despite taking to the state budget with a razor and expecting to make a $155 dollar surplus, Treasurer Kim Wells refused to rule out further job cuts, asset sales and privatisation.

As most state assets were privatised in the 1990s, Baillieu is considering privatising the Port of Melbourne and the water retailers. He has ruled out selling off schools and police stations.

The Baillieu government has tried to paint the budget as one that will save manufacturing jobs, however the budget measures do not extend assistance to developing new industries or jobs.

But while “essential services” such education, transport and health care for all Victorians are being burned to the ground, the government has found just under 80 million dollars for the racing industry.

Minister for Racing Dr Denis Napthine assured the public that essential projects like upgrading the facilities at the Shepparton Greyhound track, and a mini desalination plant at Flemington racecourse, would not be interrupted.

As part of the racing industry package, $2 million has been allocated to “Living Legend” programs to facilitate the retraining, rehousing and alternative opportunities for greyhounds and thoroughbred horses that have reached the end of their careers.

It seems that in Baillieu’s Victoria, 4200 sacked public servants will receive less government help than old dogs.


"Despite high population growth in Victoria, only one new school has been announced in the budget, to be located in Geelong’s northern suburbs". The budget is strained not "despite" high population growth in Victoria, but because of it. Continual growth means trading off enhancements that should be gained from our budget. The shortfall in the budget is due to not figuring or modeling the costs of growth. Population growth doesn't pay for itself as the infrastructure needed for the long term isn't covered by the short term revenue, or cash-flows. It's grinding our State's economy to a stand-still. There's no vision or long-term strategies, on the assumption that economic growth - via population growth - is good, desirable and the route to wealth and prosperity! Limits of growth are being ignored.

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