Victorian Labor will borrow $25.6 billion over ten years to deliver its infrastructure program if it wins Saturday’s election, doubling the state’s net debt.
Incumbent state treasurer Tim Pallas confirmed the debt plan to the media on Thursday.
The new borrowing would fund the Melbourne Airport Rail Link, a $6.5 billion expansion to the Level Crossing Removal Program, and set aside $300 million for the massive Suburban Rail Loop plan, which has an overall cost estimate of $50 billion.
$16 billion of debt would fund the North East Link road project, which Premier Daniel Andrews wants to put to tender on Monday, if Labor wins tomorrow’s vote.
Pallas’ debt plan would double Victoria’s net debt as a percentage of gross state product, from roughly 6 per cent to 12 per cent.
“We have to borrow to build,” Pallas was quoted by the ABC.
“Because the cost of inaction will last for generations. Intergenerational contributions to what are intergenerational pieces of infrastructure is vitally important. We won’t get it built unless we are prepared to play the long game.
“The previous government doubled state debt. And what did we get for it? Not much.”
In contrast, the Coalition has said it will lower state debt from 6 per cent to 5.8 per cent, with shadow treasurer Michael O’Brien accusing Labor of planning to “mortgage not only our future, but our kids’ future”.
“If you blow the budget on debt, what that means is that not only are you paying for that, but your kids and your grandkids will be paying the bill because other political parties can’t fund their promises,” O’Brien told the media.
O’Brien’s plan hinges on the 50-year lease of Melbourne Water for roughly $5 billion.
“We are not increasing taxes, we are not increasing debt, we are making sure that Victorians can get ahead instead of making them pay for unfunded promises,” the shadow treasurer said.
“I emphasise [the planned Melbourne Water lease] is not a sale, I emphasise the asset will remain in public hands. But I believe the business is one that can be leased and generate significant value, which will fund our promises without debt and without new taxes.”
The Coalition has vowed to spend $3.3 billion upgrading regional rail lines for V/Line trains to travel up to 200km/h.
Victorians head to the polls on Saturday, November 24. The final Herald Sun poll this week showed Labor ahead on a two-party preferred basis, 53 to 47. A telephone poll commissioned by The Age showed Labor ahead 54 to 46.