Crikey might finally be back in the Federal budget lock-up next week but strange information gate-keepers remain in place in Victoria where a request by the ABC for my attendance at today’s state budget lock-up was rejected on the basis that organisations could only send full-time staff.

Governments usually start off with the best of intentions about openness and disclosure but over time lapse into bad habits as we might now be seeing in John Brumby’s Victoria.

Whilst some are erroneously declaring the Laurie Oakes FOI on Treasury to be Kevin Rudd’s first test on openness, the real precedent is already in the AAT as Seven’s FOI editor Michael Mackinnon and Treasury battle it out over access to “the red book” briefings for the incoming government.

Having enjoyed one of the greatest budget inheritances of any state government in a generation, Brumby has quite brilliantly gone on a classic Labor spending spree whilst duchessing business and spinning the finances.

Jeff Kennett cut state debt from $33 billion to less than $10 billion by flogging bout $35 billion worth of assets and downsizing the public sector workforce by almost 100,000 over a remarkable seven year period.

Steve Bracks inherited an overall budget surplus that was pushing $2 billion, but it wasn’t long before his Treasurer lapsed into that old Labor trick of ignoring capital items when budgeting.

Therefore, for those who do get invited into the lock-up today, don’t listen to the baloney about “surpluses”, but instead look for the public sector borrowing program.

The central debt manager, Treasury Corporation of Victoria, reveals on this page that Victoria is rolling over $1 billion in existing debt in 2007-08, plus borrowing $1.7 billion in new debt, for a total of $2.7 billion which is suddenly a whole lot more expensive with interest rates surging.

This burgeoning borrowing program ignores the old public private partnership fiddle on projects such as the Children’s Hospital, the new Convention Centre and the $2 billion Eastlink tollroad where the debt is housed privately.

Brumby is a former teacher and yesterday he signed off on a $500 million a year increase in Victorian teacher salaries to make them the best paid in the country, which is no mean feat when you consider the efforts of Bob Carr on wage settlements in NSW.

With the property market tumbling and surging borrowing costs, the Brumby government deserves more critical scrutiny than ever today because it looks like Victorian debt is set to keep rising at more than $1.5 billion a year.

The big question for Brumby is whether he’ll be another Paul Keating who preached discipline as Treasurer, but then went on a big spending spree as Prime Minister.

Today’s Mayne Report video covers ANZ’s hypocritical bail out of Chimaera Capital.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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