Prime Minister Daniel Andrews spends on health to bring the budget back to balance

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Andrews warned the move would cost states around $5 billion, including $1.5 billion for Victoria. He said he was ready to fight his federal colleagues for an equal split of funding if Labor won.

“Whoever wins the federal election will have to deal with these issues,” he said. “And I think they will face a united team of prime ministers [premiers and chief ministers] who speak on behalf of patients and speak on behalf of the people they serve.

Andrews visits the construction site of the Metro Tunnel in Kensington in February.Credit:Photo: Wayne Taylor

So far Federal Labor has given no indication that it is willing to increase the Commonwealth contribution to states for hospitals to 50%, a move which the Australian Medical Association estimates would cost the federal budget about $20.5 billion over four years.

The Productivity Commission’s latest annual report on government services, for example, shows public hospitals in Victoria received the equivalent of $2,687 per person in recurring funding in 2019-20, compared to a national average of $2,971 per person. .

But Andrews disputed the argument that Victoria’s hospital system was underfunded even before the pandemic hit.

He said it was the efficiency of the hospital system and patient outcomes that ultimately mattered, arguing his government had increased response times for ambulances in Victoria for the most serious Code 1 calls in the world. worst to best in the country before the pandemic hit.

The daily briefing as the pandemic took hold in 2020.

The daily briefing as the pandemic took hold in 2020.Credit:Photo: Getty Images

“You have to look at the results. It’s not just about inputs, it’s about results. So on behalf of every nurse and every doctor and every ambo and every team member, I reject this idea that there was somehow this weakness in the system and who has been revealed by this unique event in 100 years.

After two years of stagnant growth during the pandemic, the government is basing its economic and political ambitions on the hope that the state’s economy will continue to rebound strongly, with unemployment now down to 4%, the lowest since the start. of the current statistical series in 1978.

Credit:Browning

But after feverish spending and borrowing to insulate the economy from the COVID-19 crisis, the state’s net debt is expected to reach about $104.5 billion by the end of this fiscal year, the equivalent about 21% of the economy.

The interest bill on this debt currently stands at 4.1% of total revenue. With inflation at the fastest pace in two decades and interest rates almost certain to rise, some economists warn now is not the time to add fuel by dramatically increasing government spending.

RMIT Professor Emeritus David Hayward said age this week that what mattered in terms of debt was whether it had been used to pay for productive things. But he warned it was also time to slow spending growth.

“Now is the time to slow borrowing and spending growth, mainly because we have reached full employment and inflation is on the rise,” he said.

Angela Jackson, chief economist at Impact Economics and Policy, also said the state budget should be placed on a more sustainable and neutral footing, although she warned that cutting spending too much could do more harm than good.

Andrews and his wife, Catherine, announcing his return to work after a back injury last year.

Andrews and his wife, Catherine, announcing his return to work after a back injury last year.Credit:Twitter

Ratings agency Moody’s is now pointing to “downward pressure” on Victoria’s credit rating, warning it will seek a plan in Tuesday’s budget to limit spending and debt.

Public sector wages are expected to absorb the equivalent of 42% of total revenue in 2021-22, up from around 36% a decade ago. This follows a massive surge in public sector hiring to help fight the pandemic, although payrolls had already risen sharply even before COVID-19 hit.

Andrews promised the budget would chart a path to financial sustainability, with debt levels stabilizing.

But he also blasted critics calling for spending cuts, warning the cuts would be “a dangerous, harmful and simplistic way to deal with these things.

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“And yes, the payroll has gone up because we’ve hired more nurses, more teachers, more police, more doctors, more ambos – the list goes on and on,” he said. -he declares.

“At the end of the day, if you want more of those employees to do more work and do better for the people they serve, then your payroll goes up.

“You can look at this very simplistically. We just need to spend less, which is a fancy way of saying cut out the things that matter most, or you can be a lot more creative. Have ambition. Invest in our people. And then your bottom line is always stronger when you invest in the people who matter most, and that’s every Victorian. If they can reach their full potential, then our state is reaching its full potential.

Andrews has signaled his intention to remain premier “as long as the community and my colleagues want me.” He said a fall last year that left him in hospital and then knocked him out of action for months forced him to reassess.

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“I’m as passionate as I’ve ever been; I am also motivated. And you know, I had a terrible accident last year… less than a millimeter [difference in impact] and I will be in a wheelchair for the rest of my life,” he said.

“It forces you to reassess things… and I had to go get fit and get strong, get healthy. I did this to get back to this job. To finish what I started; what we all started.

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