Baillieu’s razor gang. Victorian treasurer Kim Wells has wielded the axe in handing down the Victorian state budget, with $2.9 billion worth of public sector spending set to go in the next financial year.

TAFE courses also fell victim to the cuts, with $100 million worth of skills funding to go, while the government will seek to increase fines as a way of filling the revenue hole. The deep cuts will see Wells post a predicted surplus of $155 million for 2012-13.

Plunging revenue from the GST, stamp duty and payroll tax have forced the Baillieu government to shed 4200 public servants — the biggest since Jeff Kennett’s early 1990s razor gang.

Some commentators have described the budget as evidence of premier Ted Baillieu’s go-slow government, with Melbourne Age economics editor Michael Colebatch’s verdict being “low-key”. “At some point, his government is going to have to tell us what it stands for. The budget was a missed chance to do that,” he wrote.

PM seeks business interests. PM Julia Gillard is doing everything she can to try and stabilise her grip on power, including rallying support from business leaders ahead of next week’s crucial federal budget.

PriceWaterhouseCoopers local boss Luke Sayers held a dinner last night which was attended by Gillard, with a guest list including BHP Billiton chief Marius Kloppers, Wesfarmers CEO Richard Goyder and Ian Narev from the Commonwealth Bank, according to The Australian Financial Review.

“These forums don’t come up too often, it’s a great initiative, and I’d encourage any government to do more of it,” said attendee Virgin Australia chief executive John Borghetti.

Pressure builds on banks. Meanwhile, all eyes are turning to the banks today, after the RBA did their bit for mortgage holders on Tuesday by slashing interest rates a whopping 50 basis points (double the expected 25).

In what has become a tabloid ritual, News Limited newspapers The Daily TelegraphThe Advertiser and The Courier Mail have all used their front pages to strong-arm the Big Four into passing the cut on in full.

Perhaps the best effort came from the Tele, which compiled a full 50 reasons why the major banks should give maximum interest rate relief (the most compelling being #50: “IT’S THE RIGHT THING TO DO”).