Liberal Member for Western Victoria, Simon Ramsay, has offered a “word of caution” to the Andrews Government in response to official assumptions that State revenues from stamp duty on land sales will continue rolling into the treasury through the year ahead.
“Of course, as we know, the residential property market – and to a lesser extent the commercial market – has been on fire.”
Mr Ramsay told the Legislative Council on Tuesday, which is this week debating an Andrews Government bill to fund its third State Budget.
“There have been a large number of transactions on significant amounts of property that (has sold for) significantly higher (prices) and (this has significantly added to the revenues of the State Government). But (this) will not last forever.
“It worries me that this budget is based on (an assumption) that this revenue will continue through the next year, (given) there is a significant amount of expenditure in the current estimates and forward estimates based on (the assumption) that (these) rolling revenue streams (will be ongoing).”
Mr Ramsay said this could be a problem because any downturn in the property industry would result in a loss of revenues at a time when the State Government could likely be facing higher fixed costs arising from the employment of its workforce.
He said several public-sector enterprise bargaining agreements (EBAs) were either due to expire or were already under renegotiation, with personnel in the service industries in particular achieving pay rises in excess of Consumer Price Index rises.
Mr Ramsay said such bargaining outcomes could in very little time account for more than half of all State Government spending.
“And that will have a dramatic impact on the longer term sustainability of the budget,” Mr Ramsay said.
This, he said, was despite reported significant increases in revenue from other existing sources (such as speeding fines, gambling taxes and land tax) and Andrews Government proposals to introduce 16 new taxes.
“I have noted the fire services levy will go up and the Uber tax has been foreshadowed,” Mr Ramsay said.
“We know that land tax is going up, stamp duty tax is up and the annual land valuation tax will create a significant increase in rates and land tax.
“We know planning fees are going up, registration is up and there are a whole range of indirect taxes associated with royalty collections on power generators et cetera.
“We know the government has increased taxes significantly to offset the ongoing costs of the overgenerous (agreements with) our public service unions.”