‘Going down the Hume’: Premiers trade blows over Victoria’s budget billions

Premier Jacinta Allan has dismissed complaints by other states that the federal government is financially “propping up” Victoria, saying the state spent years watching Canberra shovel buckets of money into projects across NSW.

Allan also ruled out scrapping the additional financial penalty her government slugs overseas property investors or stamp duty reform – measures that experts say are needed to revive Victoria’s moribund property market.

“What do NSW, Queensland and WA have in common? They’ve all got revenues and budgets that are propped up by the mining industry,” the premier said on Thursday.

“Victoria collects the lowest tax revenue per head of population than any state. It’s great to have a partner in Canberra. For year upon year … we watched buckets of money being shovelled into projects in NSW. We were dudded our fair share under the former Liberal-National government, time and time again.”

NSW Premier Chris Minns and Queensland Transport Minister Brent Mickelberg both took aim at Victoria in the wake of Tuesday’s federal budget, which invested a further $3.8 billion into the Suburban Rail Loop – the largest sum put towards any major transport project in Australia – and allocated Victoria the highest GST payment of any state.

Minns said that money from NSW taxpayers was now “going down the Hume” into the coffers of the Victorian government and “effectively subsidising some of their spending”.

Mickelberg went further, saying the Albanese government had “chosen to put more money into the pockets of a Victorian government who has demonstrated they’re incapable of delivering projects on time or on budget, who has demonstrated they are incapable of effectively managing an economy”.

Allan spoke at the announcement of fast-tracked planning approval for a proposed high-rise housing development in Kew, on the site of a former supermarket. When built, the new development will provide 194 new dwellings. The premier said her government was “pulling every lever” to get more young people into homes.

However, property market experts and industry groups, such as the Property Council of Australia and the Urban Development Institute of Australia, say one of the most important levers would be getting rid of the state government’s extra impost on foreign investors, which is starving Victoria of overseas capital in new housing projects.

Allan said no changes were planned to reduce or eliminate the tax, which was still needed as a revenue source within the narrow base open to her government.

“We’ll always look at those settings, but we’ll do it in a way that reflects the mix of revenue options here in Victoria,” she said on Thursday.

“It’s simple really. We don’t have those mining revenues that prop up other state budgets.”

The premier also said she had no plans to transition from stamp duty to a land tax regime on residential property, which many economists and property experts believe would be more efficient.

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