Economists warn Coalition's tax cuts could deepen Victoria's budget deficit

RMIT public-policy professor David Hayward and independent economist Saul Eslake have warned that the Coalition government's budget repair proposal for Victoria is likely to exacerbate the state's fiscal woes. Their analysis points to a $9 billion gap, with $7 billion in tax cuts over four years offset only by $6.4 billion in spending reductions and $3.4 billion in new initiatives, leaving the budget outlook deteriorating.

They also flag the proposed suspension of the Suburban Rail Loop, where $7 billion has already been spent, as a further strain. Opposition leader Jess Wilson pledges a cash surplus by 2032, relying on a decade-long public-service hiring freeze and various tax cuts, but the economists say the plan lacks credible costings and transparency. Both experts urge the Coalition to adopt fiscal rules and provide a clear framework for debt reduction. The Victorian Chamber of Commerce and Industry has echoed calls for disciplined fiscal policy ahead of the election.