Economists question Victorian Liberal plan to deliver surplus while cutting taxes

Economists question Victorian Liberal plan to deliver surplus while cutting taxes

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Two leading economists, David Hayward and Saul Eslake, have expressed concerns over Victoria's Liberal Coalition budget repair plan. According to ABC News, the plan unveiled by Opposition Leader Jess Wilson aims to deliver a cash surplus by 2032, partly funded by a 10-year freeze on public service hiring.

However, the economists have warned that the plan fails to cut enough spending while reducing taxes, which could lead to a $9 billion shortfall in the state's finances. RMIT professor of public policy David Hayward conducted an analysis that found the $9 billion costings hole, stating that the plan does not add up.

Hayward identified spending cuts of $6.4 billion but also $3.4 billion in new spending initiatives, which he described as 'contradictory'. He warned that the promise to pause the Suburban Rail Loop, where tunnelling is underway and $7 billion has already been spent, would blow a huge hole in the budget.

Economist David Hayward has called for greater transparency over the Victorian Coalition's budget repair plan, stating that the plan does not add up. He emphasized that the savings do not compensate for the massive tax cuts, which could lead to a significant financial burden on the state.

The economists' concerns come as Victoria's budget is already under scrutiny. The state's troubled budget would get worse under a Coalition government, according to the economists, who have warned that the plan unveiled so far fails to cut enough spending while reducing taxes.