For decades, successive Victorian governments have engaged in a massive sell-off of public assets, promising economic efficiency and debt reduction. Yet today, Victoria faces the paradoxical reality of both depleted public ownership and unsustainable debt levels, all while maintaining Australia’s most punitive tax regime.
The Privatisation Paradox
Since the 1990s, Victoria has led Australia in privatisation. The Kennett government’s aggressive program saw the sale of electricity assets, public transport, and numerous other services. According to the People’s Inquiry into Privatisation, Victorian governments have privatized at least 118 assets and services over the past three decades.
Major privatisations included:
- The State Electricity Commission
- Melbourne’s train and tram networks
- Gas and water utilities
- The State Insurance Office
- The Land Titles Office
- Port of Melbourne
Each sale was justified with promises of debt reduction, improved services, and economic efficiency. Yet the promised financial salvation never materialised.
Debt Crisis Despite Asset Sales
Fast forward to 2025, and Victoria’s debt is forecast to exceed $156 billion, with projections reaching $187 billion by 2028. This represents one of the highest debt-to-GSP ratios in Australia, despite decades of “debt-reducing” asset sales.
The Treasury Corporation of Victoria recently reported $200 billion in total borrowings across the government sector. This staggering figure comes after the state has already sold nearly everything of value from its balance sheet.
The Triple Burden: No Assets, High Debt, Crushing Taxes
Victorians now face a triple burden: they’ve lost ownership of critical infrastructure, shoulder massive public debt, and endure 33 separate taxes, levies, and duties – the highest tax burden in Australia.
The privatised assets now generate profits for shareholders rather than revenue for the state. Meanwhile, Victorians pay higher utility bills, transport fares, and face service quality issues in many privatized sectors.
This situation adds salt to the wound of Victoria’s tax regime. Having sold the family silver, the state continues to impose new taxes like the COVID Debt Levy, Commercial and Industrial Property Tax, and Short Stay Levy – all while maintaining the highest property tax burden in the nation.
The Path Forward?
As Victoria struggles with its $600 million projected operating surplus for 2025-26 (down $1 billion from earlier forecasts), the question remains: what’s left to sell? And more importantly, when will Victorians see the benefits of these decades of privatisation in the form of lower taxes and sustainable debt levels?
The privatisation experiment has left Victoria with fewer assets, more debt, and an undiminished tax burden – a cautionary tale for other states considering similar paths