Budget & Productivity
This policy aims to make our federation work better for Victorians, so our public services are funded and delivered fairly.
It focuses on reforming how federal, state and local governments work together, building a fairer revenue base, and spending smarter by preventing problems before they happen.
The key priorities:
Making our federation work
Governments working together
Sharing the benefits of reform
How our federation works is critical to how our public services are funded and delivered. Our federation is in need of reform to ensure our three levels of government – federal, state and local – are all working together for us.
The federal government raises most of the revenue, while state and local governments spend most of it. Half of the Victorian Government’s budget comes from the federal government, and when that funding comes with conditions, it pushes resources away from the priorities we’ve identified as a state and towards federal priorities. This places limits on what the Victorian Government can do, and often leads to over-provision in some areas and under-provision in others.
The system also puts a handbrake on productivity. Most productivity reforms fall within state responsibilities, but most of the direct fiscal benefits flow to the federal government, in the form of higher income and company taxes and lower welfare payments.
The GST is a clear example of why this matters. A quarter of Victoria’s revenue comes from the GST alone, and the rules for sharing it are under review.
I’ll call on federal, state and territory governments to engage in a national discussion on reforming our federation. I’ll also work with independents in other states and the federal government on a proposal for an enduring mechanism to return the benefits of productivity reform to the states.
A fairer revenue base
Everyone paying their share
A fair return on our resources
We need to be smarter in how we levy taxes. Too much emphasis is being put on households earning income and on small business, and not enough on big business and wealth.
I’ll work with members across the parliament to review options for introducing wealth taxes. I’ll also move to establish a parliamentary inquiry into Victoria’s royalty regime, with a focus on making sure Victorians receive a fair return on our critical mineral resources.
Spending smarter
Prevention costs less
Value for public money
It is generally cheaper and more effective to prevent a problem than to respond once it has happened. Victoria’s Early Intervention Investment Framework is a Victorian Government budget and policy mechanism introduced by the Victorian Government the in 2021–22 budget, and and administered by the Department of Treasury and Finance.
It is designed to deliver timely, targeted support for vulnerable Victorians (such as people experiencing homelessness, families at risk, young people, and individuals with mental health or chronic conditions) and lower long-term pressure and spending on crisis and acute services by intervening early.
The Auditor-General has found the Framework needs clearer requirements. I’ll push to improve how it functions, by embedding it in decision making and clearly defining responsibilities.