The federal budget has left the field open for the Andrews government to develop a strategy for the state’s recovery, including targeted measures that revive Melbourne as Australia’s leading city for tourism, sports, entertainment, arts, culture, major events and population growth.
Victoria’s reputation has been battered in this crisis, and it’s not enough to leave the recovery to individual businesses.
The federal government’s new sweeteners for business investment, in the form of limitless asset write-offs and workplace subsidies, are certainly welcome.
But they are no substitute for a Victorian plan that will stimulate population growth, allow for immigration to recommence, provide a travel bubble for foreign students, and encourage overseas investors.
Let’s look at the picture the federal budget paints of our state.
Before COVID-19, Victoria’s population was expected to grow by nearly half a million between 2019 and 2022. Melbourne was on track to be Australia’s biggest capital within five years.
According to the federal budget assumptions, 400,000 fewer residents are now forecast for the state in 2022, with sharp falls in fertility rates accounting for some of the difference, coupled with a reversal of Victoria’s net interstate and overseas migration trends.
The fall in numbers doesn’t account for the potential loss of 280,000 international students who normally study in Victoria, nearly 3 million international overnight visitors a year and 11 million domestic overnight visitors — all restricted due to coronavirus lockdowns.
As the budget outlines, a fall in Victoria’s population will be matched by a decreased share of the nation’s GST from about $17 billion to $15.1 billion — with further reductions likely.
If the federal budget’s series of optimistic assumptions fail to eventuate — the expectation of a national vaccine roll-out, most state borders open by Christmas, and a return to normal working environments across the country — the picture will be even grimmer.
Melbourne has gone from being the fastest-growing city in the country to a ghost town, and not enough has yet been done by the state government to provide for its recovery.
To return Victoria to strength, we need initiatives that can offset the loss of economic activity and jobs as the result of the expected population decrease.
We need to get the state not only up and moving, but back and thriving — and it is up to the Andrews government to create the conditions that will prompt businesses to invest.
We have made the point repeatedly that business needs to play a greater part in the recovery conversation with the Victorian government.
If you want investment, businesses need to see opportunities for growth and believe the market for their investment has a future.
If you want businesses to hire, they need strong pipelines and certainty that demand will continue.
Now is the time to talk directly to business about how and where investment will be most effective.
The federal government has provided financial rewards for businesses that invest, but they will need a compelling reason to do so in Victoria.
It will be up to the state government thorough its upcoming budget to make that case.