Plus ça Change, as they say in France: “the more things change, the more they stay the same”. It’s coming up on three years since Victorians made Jeff Kennett premier, and, as it was back then, the state is an economic basket-case, thanks to a Labor government.
Of course, neither John Cain nor Joan Kirner were authoritarian socialists of the calibre of “Dictator Dan” Andrews (although Kirner hailed from the same Socialist Left faction). But they did make a series of disastrous policy decisions that plunged the industrious state of Victoria into the economic toilet. One of the most notable signs of Victoria’s economic collapse was its downgrading by international credit agencies.
Plus ça Change…
Victoria will emerge from Covid-19 with the weakest financial position among the states and territories and have triple the level of debt than before the pandemic, according to a new report from S&P Global Ratings.
Somewhat optimistically, S&P argued that the worst was over, “as strong vaccine uptake reduces the risk of further lockdowns and government support.”
“The reopening of international borders will also help as migrants, workers, students, and tourists gradually return,” the report added.
Did someone say Omicron?
Thanks to a backflip by yet another micro-party cross-bencher, it seems likely now that Andrews’ bill granting him unprecedented pandemic powers will pass. Now that WHO has declared the big, bad Omicron boogey-man “a concern”, what investors are going to regard Victoria as a safe bet?
Meanwhile, all that pandemic debt is coming home to roost.
The two most locked-down states, Victoria and NSW, were unlikely to regain their AAA credit ratings “in the next few years”, the report added.
S&P said Victoria had the weakest fiscal position and credit rating in the country […]
“Victoria continues to display structurally weaker budgetary metrics and a higher debt burden relative to domestic peers,” the report stated. “NSW’s debt burden is rising, although we believe there is sufficient headroom for this within the AA+ rating. Risks remain regarding the fiscal recovery of South Australia and the ACT. Queensland and Tasmania have emerged from the pandemic with relatively unscathed credit quality because they have benefited from fewer lockdowns.”
The Australian
As for Western Australia, no doubt Mark McGowan will brag, yet again, about his state’s performance, but does “Sneakers” really have much to crow about? WA almost solely owes its fiscal position to Chinese money: hardly something to boast about, in these times. Moreover, despite decades of rivers of Chinese gold pouring into the state, its economy repeatedly falters. Most notably, the covid-free state’s hospital system is on the brink of collapse.
It’s a bit rich to paint yourself as an economic superstar, when you’re living like a trust-fund kid continually bailed out by Big Daddy Xi.
In Victoria, meanwhile, the big question is: is there another Jeff Kennett in the wings, ready to save the Woke State from itself, again?
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