According to analysis from the Parliamentary Budget Office,Labor committed $5 billion worth of health promises and about $2 billion each for education and transport ahead of the 2022 election.
These included hospital plans for Melbourne’s north and south-east,planning for 25 new schools and $850 million worth of upgrades across 89 schools.
One Labor MP said there was increasing nervousness that funding for their local projects would not be ready in time for them to “cut ribbons” ahead of the 2026 election.
A minister said the former Andrews government had injected millions into school upgrades in recent years,but Victoria’s budget position meant it was unable to continue at the same pace.
Another government source familiar with the deliberations of the cabinet’s new budget and finance committee said it was yet to consider any possible revenue-raising options and was hesitant to raise taxes.
On Tuesday,Pallas said there would be no wholesale increase in taxes,but suggested there could be targeted tax changes around the margins.
He said he was expecting a “very,very tight budget” for what will be his 10th delivered as treasurer,but that the Allan government was conscious of cost-of-living pressures,particularly on low- and middle-income households.
“This will not be a budget where there will be essentially wholesale increases in taxes,” Pallas said.
“We put in place our COVID repair plan in the last budget. That’s not to say that we won’t do anything,but it’ll be pretty marginal.
“What we will be looking at is how we can make our tax base more efficient,I’m constantly looking at that.”
Pallas said the government had identified $31 billion of financial support it had provided during the pandemic and that the budget would not be sustainable if the state continued to fund COVID-19 measures at the same rate.
When asked what areas could be cut back,he said education and health had been “profoundly expensive” during the pandemic.
He pointed to “substantial” spending on a statewide tutoring program,which has been funded until the end of 2025.
“Believe me,I am looking very closely at all the expenditures that government is making,and we will make choices,and we will wind back the provision of support,” he said.
“Since the last budget,we’ve had multiple increases in interest rates. We’ve seen that our construction costs continue to mount as a consequence of an overheating infrastructure delivery pipeline.”
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Opposition Leader John Pesutto said households and businesses would have to suffer because of financial mismanagement.
“Victorians can expect another horror budget and that they will pay the price for Labor’s financial mismanagement through higher taxes,broken election promises and further cuts to key services across health,education,justice and roads,” he said.
Northern Futures,an organisation that has helped workers in Geelong’s most disadvantaged suburbs find work since 2007,has recently had its funding cut and faces an uncertain future as it appeals for donations to remain afloat.
Chief executive Andrew Palmer said census data had shown Norlane was the most disadvantaged small area in the state and was a key focus of Northern Futures work.
“It just astounds me that the state government has withdrawn substantial resources from what they’ve been doing here,” he said.
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