The Victorian Labor government delivered a May 2 budget in which a multi-billion dollar war chest was set aside for “law and order” and new prisons. This is despite Victoria having the lowest crime rate in Australia.
It also continued with its neoliberal privatisation program, including the sell-off of the Land Titles Registry.
Victoria aims to employ one in every 400 people as a police officer or a protective services officer and, with thousands more prison cells available, presumably the state government calculates these people will have jobs.
About 40% or $4 billion of the spending on infrastructure will be pork barrelled through public-private partnerships (PPPs) on roads, sport, hospitals, schools and regional rail.
There was an allocation of $1.8 billion to tackle domestic violence, but little to nothing to tackle climate change.
Beyond the headlines, this budget points to a government preparing for an election.
Surplus and privatisation
Predictably, the banks and corporations praised the budget surplus — $1.2 billion and $8.3 billion over four years — reportedly revenue from the property boom and nothing to do with the $9.7 billion lease of the Port of Melbourne.
Treasury tried, but failed, to camouflage the Land Titles Registry privatisation, presumably knowing it is would be unpopular. The Community and Public Sector Union is opposed to the $2 billion sale, saying it would lead to public sector jobs cuts and that it was undervalued by $2 billion.
David Hayward from RMIT criticised the sale describing it as the last stage of neoliberal privatisation: with no assets remaining there is little to sell but banal regulatory departments.
Its sale to a corporation, possibly Westpac, further focused the budget around a developer and housing bubble — which will be responsible for 45% of future budget income. The sale of the land titles office gives more power to the developers and landlords.
Corporate interests were happy that of the $10 billion allocated to infrastructure spending, $4 billion was allocated to PPPs. Budget figures show that trains, trams, buses, prisons and energy under such arrangements will incur greater debt, costs and high interest rates.
Housing and homelessness
With some 45% of the budget reliant on the overheated housing boom, the government rejected public housing advocates’ calls to divert 5–10% of property revenue to public housing.
The government trumpeted the handover of 4000 public housing dwellings to community housing agencies, but community groups have described its housing policy as privatisation by stealth.
Aboriginal groups have hailed the transfer of public housing to Aboriginal-run NGOs as a victory, but without regulatory oversight they can also sell off housing stock.
There were no new announcements on rental affordability and little spending on homelessness.
The foremost equitable housing measure was a 1% tax on landowners who leave their properties unoccupied for six months. This was smart policy move, as a $20,000 tax on a vacant $2 million house may just force the owners to rent the housing stock. Or maybe the owners will simply negatively gear the tax at the federal level.
A $20,000 homeowner’s grant for new homes in regional towns and no stamp duty on the purchase is being promoted as a strategy to stimulate regional growth. Negating this incentive is rising unemployment — 10–20% and rising to 25% — in regional towns.
Domestic violence, drugs
Some $1.8 billion is being allocated to combat domestic violence, which the Victorian Council of Social Service says is the government responding to the recommendations of the Family Violence Royal Commission.
However, looking at how the money is allocated gives cause for concern: $269 million is being given to the courts “to enhance the response of Victoria’s legal system to family violence”, which is almost three times higher than the $95.4 million “to strengthen our family violence workforce”.
Some $138 million is being allocated to housing, $448 million for 17 “safety support hubs” and $271 million for “victim assistance and after-hours crisis support”.
But the tending of NGO contracts for housing and social assistance is further evidence of the ongoing privatisation.
The $81.1 million “Ice Action Plan” will add just 30 beds, despite calls by the Victorian Alcohol and Drug Association for 300.
Victoria will add 3100 more police officers to the current force of 12,000.
Some $288 million will be spent on new youth justice supermax jail and $74 million to upgrade security at other prisons. The budget also allocated $308 million to protect against “serious violent offenders”. GEO Group Australia’s 1000 bed Ravenhall Prison in Melbourne is scheduled to open later this year.
Australian Medical Association Victoria said it was “appalled that no further funding has gone to mental health”.
Roads, public transport and rail
The government obsession with roads continues with a $300 million allocation to build the Mordialloc Bypass and $700 million for the M80 Ring Road. According to Dr Tony Morton of the Public Transport Users Association’s, “Australian governments may be the last in the world to recognise that new roads generate new traffic” and that “the splurge on new roads in the past two decades is to blame for the chronic congestion we experience as motorists”.
The Greens criticised the plan for $1 billion on toll roads but only $10 million for a new airport rail plan. The PTUA backed the $1.4 billion for the Regional Rail Revival program “subject to the community being involved in the detailed development”.
But there was no innovation on high-speed rail and increased connectivity in the city.
Sport vs art
Worth billions more than sport, the art and creative industries received $50 million less funding. Meanwhile, the sport pork barrel grew to an astonishing $422 million.
The Age’s correspondent Tim Colebatch was one of very few to criticise the sport spending: “I love the Australian Open, but why do Victorian taxpayers have to be an ATM for whatever Tennis Australia wants to build next at Melbourne Park? It has five show courts already. There are far greater priorities than spending $277 million to build it a sixth one.”
Who knew grass was so expensive?
Jobs and renewable energy
Victorian Trades Hall Council secretary Luke Hilakari championed the spending on roads, regional rail and schools because it will create new jobs.
“This is a budget that puts cranes in the sky, shovels in the ground and food on the tables of Victorian workers. This budget is great for jobs. 250 jobs are being created every day under this government.”
More than 60% of the jobs, however, are now part-time, casual or contract. Meanwhile, the budget offered 15% wage increases for top executive managers.
The total lack of any new initiatives on renewable energy and green jobs brought criticism from environmental groups.
Environment Victoria’s CEO Mark Wakeham said: “Unfortunately expenditure on climate change and clean energy programs in the budget is dwarfed by over $1 billion funding for new freeways that are likely to increase the state’s greenhouse pollution.
“It’s really disappointing that in a budget with a $1.2 billion surplus we haven’t found adequate funding to match Victoria’s leadership aspirations on climate change.”
Cars were taxed slightly higher but there is no tax incentive for buying an electric car.
Missing also was clean and green agriculture investment in the regions, with organics groups calling for major investment.
The Wilderness Society and the Australian Conservation Foundation “welcomed the $28.6 million for improving Victoria’s parks and 110 million for pine plantations”. They also called on the government “to create the Great Forest National Park, and substantially reduce logging in our precious native forests”.