Victoria Treasurer Tim Pallas.Credit:Eddie Jim
Friday’s figures show the government’s revenue surging past a record $77 billion but spending at almost $97 billion,with Treasury laying the blame for the significant deterioration in the state’s public finances squarely on the outbreak of the Delta variant of COVID-19.
The budget position downgrade comes despite expectations tax revenue will increase by 14.4 per cent to $27 billion in 2021-2022 and grow by more than 6 per cent,on average,for each of the next four years.
Revenue from the government’s two main property taxes,stamp duty and land tax,is tipped to soar this year by nearly 20 per cent to $7.7 billion and by 32.6 per cent to $4.3 billion respectively in 2021-2022.
The public sector payroll is tipped to grow again by more than 9 per cent,with employee costs for the government growing to $32.7 billion this year.
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The report shows the government is due to spend more than $10 billion more than predicted earlier this year,mostly on the fight against the Delta variant outbreak and the various business and community support measures associated with the lockdowns.
The budget will be showing other damage from COVID-19 for several years to come. Treasury predicts the state’s share of Commonwealth GST money will decrease by more than $1 billion between 2022 and 2025,because of the dip in Victoria’s population,which shrunk by 43,000 people in the first 12 months of the pandemic.