By Glen Davis
In recent times, a lot has been said about the level of Government debt in Victoria. The forecast level of Government debt is $10.3B for the 2023-24 financial year, and that this will decrease in the next few years to gradually return to surplus.
There are loud voices decrying this debt. As expected, the voices of the opposition Liberal Party and their rural lackeys, the National Party have been shrill. The corporate media, especially the dominant Murdoch empire, makes a big deal of it. Victoria is being portrayed as some sort of economic basket case.
No surprise Murdoch and the rest of the corporate media owners have made this stance. They’d rather money constantly flow into the coffers of their big business mates, than have it spent improving our lives.
In recent years, the Andrews led ALP Government sought about undertaking major infrastructure work. The removal of level crossings, the North-East Link, the Suburban Rail Loop, the building of new woman’s health clinics at 20 hospitals, and new campuses in in the major ones are the major ones.
These are some of the ways debt gets used to improve life in Victoria. Much work is created along the way, and money spent in vital areas of benefit to all. This helps make Victoria a better place to live for not just us, but future generations.
Let’s not forget that former Victorian Liberal Premier Sir Henry Bolte used debt to oversee infrastructure schemes in his time. The Latrobe and Monash Universities, the West Gate Bridge, and Tullamarine airport. These were some examples of the same infrastructure development approach.
Bolte used state debt to fund works that would benefit future generations of Victorians, being aware that they as beneficiaries of this work, the community could bear some of the future costs. During Bolte’s time, debt as a percentage of the Victorian economy was as high as 58 percent of the state’s budget.
Hmmm. I don’t see much of this mentioned by the state opposition, or by their cheer squad in the corporate media.
Government debt is in no way analogous to household debt. Governments can borrow money at manageable rates of interest. If the expenditure leads to raising the state’s productive capacity, the means to cover the cost will be in place and can be collected through taxes on higher earnings and other means. Infrastructure development is the best type of investment to build productive capacity.
There is also the possibility of introducing more progressive taxation system. This is the rich and mega corporations pay the extra needed to provide for the needs of the majority.
The argument that debt is always bad should be consigned to history. In any case, most of our recent governments have had no problem with crating debt through handouts to private corporations. Surely, anyone can see an inconsistency here.