Victorian opposition pledges to legislate a cap for the state’s ‘spiralling’ debt as election promises mount

The Victorian opposition has pledged to legislate a cap on government debt if elected, as both major parties pitch themselves as the solutions to the state’s healthcare crisis.

The Coalition’s proposed debt cap is a major part of the Liberal-National’s Long-Term Economic Plan for Victoria, expected to be a pillar of the upcoming election campaign.

According to the May budget, net debt is expected to sit at $101.9 billion at the end of this financial year and is forecast to account for more than a quarter of the state’s economy by the 2025-26 financial year.

“That debt is so large, it’s bigger than the combined debt of New South Wales, Queensland and Tasmania,” Shadow Treasurer David Davis said.

Mr Davis said a cap on borrowing was needed to “deal with Victoria’s growing and spiraling debt and increasing taxes”.

David Davis speaking outdoors.
Shadow treasurer David Davis says the state needs to rein in borrowing and spending.(AAP: Diego Fedele)

He again criticized the government for its blowouts on major infrastructure projects, which have cost over $30 billion more than initially forecast.

The government’s budget plan is centered around bringing the state back to an operating surplus by 2025-26, then addressing the debt.

Part of that plan relies on projections that inflation will reach 3 per cent on the last financial year, before easing to 2.5 per cent on average in 2022-23 — far behind the real-world inflation rates currently biting across Australia.

“That will cause real challenges [in] servicing that huge debt,” Mr Davis said.

Both major parties have promised a huge spend on responding to the state’s healthcare crisis if elected in November.

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