{"id":26860,"date":"2025-07-28T06:40:11","date_gmt":"2025-07-28T06:40:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/26860\/"},"modified":"2025-07-28T06:40:11","modified_gmt":"2025-07-28T06:40:11","slug":"victorian-unemployment-to-surge-as-bubble-bursts","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/26860\/","title":{"rendered":"Victorian unemployment to surge as bubble bursts"},"content":{"rendered":"<p>The State of Victoria has been living in a public service bubble.<\/p>\n<p>Victoria\u2019s net debt was $22.3 billion when the State Labor government delivered its inaugural state budget in 2015.<\/p>\n<p>As of FY25, Victoria\u2019s net debt has skyrocketed to $155.5 billion and is projected to rise to $194 billion by FY29.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/07\/Victorian-net-debt-1-2.png\" width=\"660\" height=\"396\" alt=\"Victorian net debt\"\/><\/p>\n<p>Advertisement<\/p>\n<p>Victoria\u2019s dire budget situation is due in part to a massive increase in public service wages, which have consistently exceeded budget estimates.<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/07\/Victoria-public-service-wage-costs.png\" width=\"660\" height=\"396\" decoding=\"async\" loading=\"lazy\" alt=\"Victoria wage costs\"\/><\/p>\n<p>In the 15 years leading up to 2022-23, the state\u2019s public sector headcount increased by 59%, outpacing population growth of 29%.<\/p>\n<p>Advertisement<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/07\/Victoria-Public-Service-Growth.png\" width=\"660\" height=\"455\" decoding=\"async\" loading=\"lazy\" alt=\"Growth in the public sector\"\/><\/p>\n<p class=\"wp-caption-text\">Source: The Australian<\/p>\n<p>Additionally, the state\u2019s public servant wage bill increased by 152%, outpacing all other Australian states.<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/07\/Victoria-Public-Service-Wage-Bill.png\" width=\"660\" height=\"465\" decoding=\"async\" loading=\"lazy\" alt=\"Growth in public sector wage bill\"\/><\/p>\n<p class=\"wp-caption-text\">Source: The Australian<\/p>\n<p>Advertisement<\/p>\n<p>Victoria\u2019s wage bill, which is the state government\u2019s largest expense, totalled $19.5 billion in FY15. The most recent state budget projected that employee costs will hit $44 billion by FY29.<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/07\/Victorian-government-employee-expenses.png\" width=\"649\" height=\"559\" decoding=\"async\" loading=\"lazy\" alt=\"Victorian wage expenses\"\/><\/p>\n<p>Use of external consultants and contractors by the state government has also <a href=\"https:\/\/www.afr.com\/politics\/federal\/victorian-public-service-paying-for-advice-its-ignores-report-finds-20250619-p5m8pi\" rel=\"nofollow noopener\" target=\"_blank\">ballooned<\/a>.<\/p>\n<p>Advertisement<\/p>\n<p>Despite the boom in public servants and consultants, Victoria has the highest unemployment rate in the nation.<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/07\/Unemployment-rates-by-state.png\" width=\"660\" height=\"286\" decoding=\"async\" loading=\"lazy\" alt=\"Unemployment by state\"\/><\/p>\n<p>Now the public sector teat is being withdrawn, which risks driving up unemployment.<\/p>\n<p>Advertisement<\/p>\n<p>Victorian Treasurer Jaclyn Symes in February tasked Helen Silver with a review of the state\u2019s public service.<\/p>\n<p>The former secretary of the Premier\u2019s department presented the results of her review to Symes in June, with Silver having been asked by Symes to look at the consolidation of government entities and cutting up to 3,000 public sector jobs.<\/p>\n<p>Symes <a href=\"https:\/\/www.afr.com\/politics\/victorian-public-service-changes-begin-ahead-of-cost-cutting-report-20250725-p5mhpu\" rel=\"nofollow noopener\" target=\"_blank\">says<\/a> she will release the results of Silver\u2019s review in coming months, while a number of Victorian public service agencies and departments have already begun restructuring ahead of the release of the report.<\/p>\n<p>Advertisement<\/p>\n<p>Symes met with global ratings agencies S&amp;P, Moody\u2019s, and Fitch in New York last month, whereby she highlighted the Silver review to reassure analysts that the government was moving towards more fiscal prudence.<\/p>\n<p>Between 2000 and 3000 public servants\u2014or roughly 5% to 6% of the workforce\u2014are slated to lose their jobs as part of a plan to restore the public service headcount to its pre-pandemic levels.<\/p>\n<p>\u201cSome areas have been quite explicit that it\u2019s about [reducing] the head count to accommodate the reduced funding\u201d, a public servant speaking on the condition of anonymity told The AFR.<\/p>\n<p>Advertisement<\/p>\n<p>\u201cHowever, saying that it\u2019s based on budget outcomes and not the Silver review is disingenuous because interim findings from the Silver review informed the budget\u201d.<\/p>\n<p>\u201cThe mood is incredibly stressed and tense \u2026 especially as we\u2019re also waiting for the Silver review to drop. Potentially, staff have to go through another restructure after the Silver review is made public\u201d, they said.<\/p>\n<p>The Victorian government is under pressure to reduce spending after a decade of excessive expenditure on bureaucrats.<\/p>\n<p>The result will be higher unemployment.<\/p>\n<p>Advertisement<\/p>\n","protected":false},"excerpt":{"rendered":"The State of Victoria has been living in a public service bubble. Victoria\u2019s net debt was $22.3 billion&hellip;\n","protected":false},"author":2,"featured_media":26861,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":["post-26860","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/26860","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=26860"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/26860\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/26861"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=26860"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=26860"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=26860"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}