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Everyone looks set to get a prize in Treasurer Tim Pallas's State Budget.
It will be a Budget for the COVID era, loaded with deep debt and deficit, tax cuts and grants galore.
It will address two problems, providing aid for an economy and community shattered by the pandemic, and a chance for Premier Daniel Andrews to get a fresh grip on Victoria's political agenda.
But the eye-watering level of debt also creates a potential political headache.
The budget measures that have been happily dripped out by the Government so far are on brand for Andrews, with a steady stream of major infrastructure projects.
There's also a smattering of initiatives on mental health, education, disabilities, tourism and power bills.
Melbourne's emergence from the COVID-19 crisis has boosted Daniel Andrews's political fortunes.(ABC News: Darryl Torpy)But to build projects, pay for the tax cuts flagged by Pallas and fund new programs, the Government will plunge the Budget into the red and borrow big — net debt will climb to a staggering $154.8 billion in 2023-24.
The Government is not worried about these big numbers, confident that interest expense as a share of total revenue is more than manageable, averaging only 4.4 per cent of revenue per year over the forward estimates.
Borrowing big in a battered economyA major challenge attached to the mounting debt is the political exposure, with Labor vulnerable to Liberal scare campaigns — especially if debt starts affecting services and taxes.
Victoria's rules for Christmas and summer[img]https://www.abc.net.au/cm/lb/12909114/data/christmas-dinner-data.jpg[/img]
Restrictions are relaxing further in Victoria, with some workers heading back to the office before the holidays and more visitors allowed in homes.
The Opposition will focus on the quality of the borrowing, worried about taxpayer wastage.
It argues debt cannot be used to pay for cost blowouts on major projects. Politically, the Opposition is right with voters often frustrated with government waste.
At the centre of Pallas's sixth budget is an attempt to solve the problem of a battered economy, with a focus on stimulus and assistance to a community smashed by COVID-19.
Victoria has been hit harder than any other state due to the deadly second wave caused by failures in hotel quarantine.
That debacle should be a political millstone around the neck of the Andrews Government, but its subsequent handling of the pandemic — while tough for Melburnians in particular — has proven successful.
Not a unique approachThe further easing of restrictions and more than three weeks without a single COVID-19 case has helped Andrews's star rise once again, despite some angry critics.
"We recognise that we're not through the worst of the economic event at the moment,'' Pallas told the ABC this week.
Polling shows the Premier enjoying two-thirds approval and the Coalition Opposition in disarray, the Liberal leader failing to cut through, with some voters unhappy with a perceived undermining of the public health messages.
Despite this, it is the state of the economy over the next two years that is likely to determine the Government's fate in 2022.
Unemployment sits at 7.4 per cent and underemployment is even higher. Work is a pivotal issue.
Finding ways to get more people into work is critical.(ABC News: John Graham)Should unemployment stagnate or get worse in the COVID-19 recovery, Andrews could be judged harshly — it's why there's so much focus on stimulus and job creation in Tuesday's Budget.
Andrews and Labor are taking a calculated approach, following the Federal Government and other states to borrow to tackle the economic crisis. Victoria's approach is hardly unique.
It is likely to provide another sugar hit for Labor and lay the foundations for its re-election campaign in 2022.
This article first appeared on www.abc.net.au
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