Treasurer Tim Pallas quits parliament after 18 years as state bogged ...

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The Age

Treasurer Tim Pallas quits parliament after 18 years as state bogged down in debt

Treasurer Tim Pallas is quitting politics, after delivering a mid-year budget update that reveals Victoria is mired in billions of dollars in debt.

Although Premier Jacinta Allan has publicly backed her treasurer, insiders say the relationship between the offices of the premier and Pallas had been strained recently as they negotiated the budget process and last week’s economic growth statement.

Four government sources, speaking anonymously to detail confidential discussions, told The Age that repair had increasingly become a point of contention within the Allan government.

Pallas’ 10th – and final – state budget revealed that the government was delaying more than 100 projects, and The Age revealed last week that the state had been forced to refinance almost $2 billion in debt that was due to be paid off.

In a probe of the state’s reports for the past financial year, released last month, the Victorian Auditor-General’s Office said there was no “clear plan for long-term fiscal management” as government departments and agencies incurred another operating loss.

While Pallas has been seen as a loyal servant and trusted set of hands over the state’s finances, Labor has increasingly been on the nose with voters. Last month, Opposition Leader John Pesutto overtook Allan as preferred premier for the first time. The poll was conducted before Pesutto’s devastating loss in his defamation court battle with ousted Liberal MP Moira Deeming.

Treasurer Tim Pallas has been on the Labor frontbench since 2006.Credit: Eamon Gallagher

Pesutto has steadily eroded Allan’s lead as preferred premier since she took the helm last year from Daniel Andrews. A Resolve poll in October last year reported that Allan was preferred premier for 38 per cent of voters compared with 19 per cent for Pesutto. By November this year, 30 per cent of voters preferred Pesutto, compared to 29 per cent who wanted to stick with Allan.

The most recent budget revealed Victoria’s net debt was forecast to rise from $156.2 billion by the end of the next financial year to $187.8 billion by June 2028.

The figures forced the government to delay several key initiatives and walk away from a pledge to build a new Royal Melbourne Hospital and Royal Women’s Hospital at the Arden precinct. The budget also confirmed the Airport Rail Link would be delayed at least four years because of a stalemate over the design of the station.

Pallas’ resignation will trigger a byelection in the seat of Werribee, where he fought off a strong challenge at the 2022 state election.

Tim Pallas and Premier Jacinta Allan in parliament.Credit: Joe Armao

The Liberal Party was hoping to target the Labor stronghold at the next general election scheduled for 2026 after it recorded a boost to the primary vote in 2022.

But the byelection means the opposition will be forced to contest the seat in Melbourne’s outer west earlier than expected, as Pesutto has made it clear he wants his party to run candidates in every contest.

Pallas, 64, joins a long list of Labor MPs to depart in recent years, causing a shake-up of several senior positions.

As well as Andrews, the list includes former deputy premier James Merlino, former health minister Martin Foley and former police minister Lisa Neville, as well as Martin Pakula, Jill Hennessy, Jaala Pulford, Richard Wynne and Luke Donnellan.

Pallas and Andrews had worked side-by-side on Labor’s frontbench since the 2006 election, and both held key leadership positions before, during and after the worst of the COVID-19 pandemic.

After Andrews quit, Pallas was part of a failed power play by his Socialist Left faction to maintain control of the Labor Party’s leadership and install him as deputy premier.

Public Transport Minister Ben Carroll, from the right, was instead elected deputy unopposed as part of a last-minute peace deal.

In her first press conference as premier in September last year, Allan heaped praise on the long-standing treasurer.

Then-premier Daniel Andrews and Tim Pallas in 2018.Credit: Eddie Jim

“Tim has been an outstanding treasurer of this state,” she said. “He’s handed down nine budgets. Nine. That is no mean feat. He’s a great man.”

The Werribee MP oversaw his first budget as treasurer in 2015, but his time in charge of the state’s finances is a tale of two halves.

He was the economic architect of the government’s massive infrastructure program, including delivering the funding for Labor’s level crossing removal projects and the Metro Tunnel.

But that, combined with COVID-19 and the state’s strict lockdowns, has left the state burdened with enormous debt and serious cost blowouts on major projects such as the West Gate Tunnel.

Before he was an MP, Pallas was the assistant secretary of the Australian Council of Trade Unions and worked as chief of staff to then-premier Steve Bracks.

He won the state seat of Tarneit in 2006 and was immediately appointed to cabinet as roads and ports minister.

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