Victorian Debt and Unemployment

The Victorian state election is fast approaching (29th of November) so I thought I would do a little research into Victorian debt and unemployment to try and educate myself better on the true standing of these two often politicised elements of government.

With the political spin going into over drive there is truthful stuff that is taken advantage of like the Desal plant which will remain a massive white elephant until the next major drought event and Myki which was an ALP disaster made worse by the LNP with the removal of short term tickets. But then there is a lot of mistruths and misinformation that just really annoys me because the average Joe tends to just blindly believe everything they see in the Herald Sun. So instead of relying on the propaganda machines of the two main parties I thought I would do a little research for myself.

Debt
I went to the Victorian Department of Treasury and Finance (DTF) website and downloaded the following two excel documents:

  • Net Debt
  • Net Financial Liability
  • What I found was quite interesting. For all the talk about the ALP and debt it seems the last 4 years of government has been worse than the glory debt days of the Cain / Kirner governments. The following Victorian Net Debt Graph shows that the current government has increased Net Debt from $8b when they took government to $21.2b. To put that into a bit of context measured against our Gross State Product, net debt has increased from 2.5% of GSP to 5.9%, you can see that graph here.

    Another interesting measurement of debt I found was the Victorian Net Financial Liabilities. The DTF suggests this measurement of debt may be a bit more realistic;

    Net financial liabilities are the total liabilities less financial assets, other than equity in public non-financial corporations and public financial corporations. This measure is broader than net debt as it includes significant liabilities, other than borrowings e.g. accrued employee liabilities such as superannuation and long service leave entitlements.

    Jobs
    Back on the 6th of October the ALP promised to create 100,000 jobs and then on the 7th of October the LNP promised to create 200,000 new jobs.

    Unemployment has become a massive focus in Victoria this election campaign. This graph shows that when the LNP took over in December 2010 unemployment was at 5.1% and it has risen to 6.8% as at October 2014. This is the worst it has been since September 1999, but then you hear the Premier and the Treasurer justify their efforts with a phrase like “We’ve created over XXX new jobs since coming to government”. So where is it all going wrong? Below is a table showing total increases in Employed, Unemployed and Participation levels in Victoria. Clearly you can see while creating 87,600 jobs is a great thing when your participation increases by 150,400 over the same period you haven’t really done all that well.

    Update 11th November 2014: Updated to include the October 2014 employment figures.

    Matt.

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