A new report from Victoria’s auditor-general has found the government recorded an operating loss of $2.6 billion in the last financial year, $400 million more than it budgeted.<\/p>\n
It adds to a total loss of more than $50 billion over the last six years, as concerns over the state’s growing debt mount.<\/p>\n
Monday’s report from the Victorian Auditor-General’s Office (VAGO) shared the results of an audit into the state’s finances and the spending in the general government sector (GGS).<\/p>\n
Despite collecting $2 billion more in tax and receiving an additional $5.5 billion from the federal government, higher operating expenses and $1.1 billion in higher interest expenses ate into the gains.<\/p>\n
While the total deficit in 2024-25 was lower than the $4.2 billion deficit recorded in the year prior, it was still $400 million more than the government initially budgeted for.<\/p>\n
VAGO acknowledged the government had worked to slow the growth of operating expenses amidst challenging financial conditions.<\/p>\n
Premier Jacinta Allan said the report was an endorsement of the government’s financial planning.<\/p>\n
“It should also be acknowledged that the auditor general’s report outlines how the government’s economic and fiscal strategy is working,” she said.<\/p>\n
“It is working with that focus on jobs, growing the economy, investing in the productive infrastructure like the Metro Tunnel.”<\/p>\n
The report said government was forecasted to return to a net operating surplus of $611 million in the next financial year.<\/p>\n
VAGO addresses Victoria’s ‘reliance’ on debt<\/p>\n
The VAGO report said the figures also reflected a growing reliance on debt and a subsequent growth in interest payments.\u00a0<\/p>\n
Higher interest rates are also expected to increase the burden of the debt over the next four years, with interest payments rising from $6.8 billion this year to $10.6 billion by 2028\u201329.<\/p>\n
Gross debt jumped from $168.8 billion last year to $187.9 billion this year, growing faster than the state’s economy.<\/p>\n
“Over the last decade, debt growth has consistently outpaced GGS revenue and state economic growth, again a trend expected to continue,” the report said.<\/p>\n
“These persistent deficits highlight the state’s reliance on debt to fund its capital infrastructure program.”<\/p>\n
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A significant portion of Victoria’s debt stems from government infrastructure investment. (ABC News: Patrick Rocca)<\/p>\n