Victoria is heading for financial disaster

Victoria is heading for financial disaster that will make the lockdown look like a minor incident along the road to Dan Andrew’s destruction of the state he has been overseeing. It’s only a small story, of course, but at least it is being mentioned: Building boom blamed for blowouts. It’s described as an “Exclusive” mostly because none of the other members of the Victorian media will go near it. You will never see this on the ABC for example.

VICTORIAN road projects are suffering big cost blowouts as the Andrews government battles to rein in the rising cost of labour and materials.

The Sunday Herald Sun can reveal a series of suburban road upgrades have cost more than $50 million more than first planned, and some projects have blown out by nearly a quarter of the original cost….

Cost blowouts also affected works to strengthen bridges in regional Victoria, and just one of seven planned upgrades was completed last year because of changes to projects and rising costs.

It’s modern economic theory that is partly to blame, since everyone is now taught how public spending is necessary to create jobs. Absolutely wrong, of course, but everyone thinks it so that phenomenal amounts of money are poured into one wasteful project after another, projects that will never ever recover their costs in the value of their retunrs to the community. But it is possible that help is on the way, or at least a small modicum of coherence. I’ve emphasised the bits that need to be understood and then become the focus of attention, first for the Opposition and then for the rest of the community.

Opposition Transport spokesman David Davis said the government could not manage the finances of major projects.

Everywhere you look … costs have blown out and timelines are shot,” he said.

“The community expects projects to be built on time, they don’t expect money to be wasted or squandered.

“Many projects are delayed and its all down to the government’s own incompetence.”

The issue is NET costs, that is, the relative size of the return as against the costs of doing whatever is being done. Seems basic, but there is not a socialist government in the world that gets it right, with almost as many non-socialists as clueless as the socialists.

This entry was posted in Economics and economy, State Politics. Bookmark the permalink.

42 Responses to Victoria is heading for financial disaster

  1. Texas Jack says:

    Federal debt will hit $870B by June, a.k.a proportionally worse per capita than Victoria’s mess. What were you expecting when Scott Morrison runs around making Kevin Rudd look like a paragon of fiscal constraint?

  2. Dr Spinbull of Spring Street . says:

    Difficult to understand how this can happen under the rule of the highly competent career politicians of the Andrews Labor government . They also have the assistance of the party member public servants and their Chinese advisors .
    There are many causes of this unfortunate situation , systemic racism ,gender and sex discrimination refusal to recognise aboriginal superiority and the dark influence of the evil Trump .
    We have every confidence in Comrade Andrews who saved us from the US covids virus with the loss of only 800 lives , we willwin with aid of the Great Belting Robe system .wewill overcome ny obsticle .

  3. Shy Ted says:

    Why isn’t the acronym CFFMEU in there?

  4. Carpe Jugulum says:

    Go back and look at the building contracts, that is where the flaw lies, having done a ton of contracts for DEET during the BER the contracts are so poorly written that any competent Project Manager on the builders side will bend the government over a table and fist them with a watch on for variations, extras, lost time, inclement weather, and RFI delays.

    I don’t miss working in Aust

  5. iamok says:

    Why for the love of God are we not investing in our own natural resources? It drives me bonkers to see all this money pissed against the wall for union and political mates. FMD

  6. egg_ says:

    Federal debt will hit $870B by June, a.k.a proportionally worse per capita than Victoria’s mess. What were you expecting when Scott Morrison runs around making Kevin Rudd look like a paragon of fiscal constraint?

    Phil Coorey in cloud cuckoo land on Their ABC Insiders this morning said we’re now definitely in a “V-shaped” recovery curve – only that it is 4? months later than the Govt predicted – but we are better off than we would have been by the Govt’s actions.

    A trillion dollar National debt for the Couf?

    Get real, Sunshine.

  7. Tel says:

    How did you go broke?

    Oh you know … slowly at first … then all of a sudden.

  8. egg_ says:

    a series of suburban road upgrades have cost more than $50 million more than first planned

    Hunchback sticking to OBOR, when he’s not paying a billion dollars NOT to build a tunnel?

    Let him take out OBOR loans – he’ll probably fare better than Scumoron.

  9. H B Bear says:

    It’s been a while since I was employed in Victoriastan. Our industry was affected when the desal plant rates started flowing all over the place. I doubt it has got any better.

  10. Texas Jack says:

    While in power the Coalition have gifted the ALP the freedom to spend and/or promise to spend as much as they darn well choose. They’ve validated the central position of the Left.

    I don’t blame Daniel Andrews for this.

  11. C.L. says:

    The labour movement was always going to Detroit these post-COVID ‘recovery’ projects to the nth degree. You’re wasting your time trying to shame them on the basis of what they’re doing to generational accounts. They couldn’t give a single fuck.

  12. Roger says:

    Roads & bridges?

    Hold my beer.

    QLD is predicted to hit $100bn in public debt soon and Brisbane has just been announced as the IOC’s preference to host the 2032 Olympics.

  13. H B Bear says:

    The Pony Club loves its bread and circuses.

  14. egg_ says:

    QLD is predicted to hit $100bn in public debt soon and Brisbane has just been announced as the IOC’s preference to host the 2032 Olympics.

    Are banana republic sh1tholes mandatory selection criteria?

  15. Leo G says:

    QLD is predicted to hit $100bn in public debt soon and Brisbane has just been announced as the IOC’s preference to host the 2032 Olympics.

    If the costs and revenues from the Sydney Olympics are indicative, costs for Brisbane will blow out 100%, with costs close to $20 Billion and revenues less than 20% of costs.

  16. mundi says:

    The hilarious part is that no city on earth in dumb enough to host the Olympics – Brisbane is the only real city on earth putting its hand up.

    Olympic games cost about $8b to run, and that is today. By 2032 it will probably be twice that.

    The IOC had to start paying counteries to host it. Brisbane will be getting about $2b.

    Needless to say this will at least be a $10b black hole.

    The commonwealth games ended up costing nearly $2b and made back absolutely nothing. They still can’t even properly sell the atheletes village that was meant to be turned into units – because it would tank the unit price – so they still have many units ‘off the market’.

  17. Roger says:

    Are banana republic sh1tholes mandatory selection criteria?

    Iirc the other contenders are Bombay, Jakarta & Doha, but they’ve already been marked down by the IOC.

  18. Texas Jack says:

    Australian total government debt? A$1.283 Trillion

  19. Texas Jack says:

    $51,320 per head…

  20. Roger says:

    Iirc the other contenders are Bombay, Jakarta & Doha, but they’ve already been marked down by the IOC.

    If nothing else, the IOC knows a good mark when they see one.

  21. covid ate my homework says:

    There’s always talk about the debt, but what about unfunded liabilities? Like superannuation, try getting away with that one if you’re a small to medium business.

  22. dopey says:

    Move it to Toowoomba and get a local man to run it.

  23. m0nty says:

    25% cost blowouts in construction are relatively low. I mean, look at how much the Libs are spending on the War Memorial, that has blown out by a lot more!

  24. stackja says:

    Victorian voters elected Cain II. Dan was elected with the same policies. What could possibly go wrong?

  25. Carpe Jugulum says:

    25% cost blowouts in construction are relatively low. I mean, look at how much the Libs are spending on the War Memorial, that has blown out by a lot more!

    This has to be a pisstake.

    A 25% cost blowout in the private sector would have your arse in court, stick to things you know about as construction is not your forte

  26. Boxcar says:

    The two projects referred to in the Herald-sun increased from $116m to $153 m – over 30%. That’s just MMT (Modern Mathematical Theory).
    Why would Davis know or care about fiscal responsibility?
    Trump probably knew as much as or more about the economy than “experts”, but how would that have served his interests when kicking the can down the road is now mainstream economics?

  27. Craig Mc says:

    And here I was thinking I’d never see a Victorian premier more destructive than Joan Kirner. Rest easy Joan, your mantle has been taken for all time.

  28. Siltstone says:

    Federally we have the dud submarines, still on the drawing board and massively overbudget and massively late. 4r

  29. Professor Fred Lenin says:

    These projects seem to be like the Krudsters NBN.
    This wonderfull project will cost between $6billion and $468 billion when it is finished in 5 o to 37 years .
    I was a project manager for years mconstruction jobs DO NOT blow out 25 percent That is sheer incompetence or corruption , we used to work on price , ,quality and time the project managers guiding lights .

  30. Squirrel says:

    A massive property bubble and a debt-funded transport infrastructure binge – Victoriastani history teaches us that nothing could possibly go wrong with this economic cocktail.

  31. H B Bear says:

    Who hasn’t wanted to catch the train to the airport? Soon you can do it in Perth too.

  32. Russell says:

    Every good engineer knows that Waste is the Enemy.
    Anyone in business knows that Waste is the Enemy.
    Even every decent “conservationalist” knows that Waste is the Enemy.
    The Greens have lost their conservation credentials …
    Labor has lost its business credentials …
    Government engineers have lost their professional credentials …
    The Waste Enemy has invaded and is plundering Oz big time.

  33. theleftfootkick says:

    I don’t know why anyone would be surprised, really, projects drag on forever with minimum hours worked every week, more time taken up with OH&S issues than construction. Highest paid workers of anywhere in the world by comparison, least productive and so it goes on! Every construction worker knows that he or she is on a winner as far as raking in the dosh.

  34. Yarpos says:

    Whats the economic return on bridge strengthening? Oh yeah not having you and the missus plummet into that gully with the heavy truck you were following. Probably better to ask why it wasnt built properly in the first place.

  35. Andre Lewis says:

    Why surprised? Its a Labor government so all public works are automatically union sites and the CFMEU decides who gets employed, how much everyone gets paid and how long it takes. The project budget is irrelevant to the union organisers and, it seems, the project managers.

  36. mareeS says:

    It will be good to see Victoriastan join SA and TAS in the arse end of Australia, Close the borders now, before they escape. Texas should have done that against California and its wackies.

  37. rickw says:

    Go back and look at the building contracts, that is where the flaw lies, having done a ton of contracts for DEET during the BER the contracts are so poorly written that any competent Project Manager on the builders side will bend the government over a table and fist them with a watch on for variations, extras, lost time, inclement weather, and RFI delays.

    Another layer to the issue is that Dickhead Dan has pushed for the engineering to be done fast, this has meant that:

    1). Services coordination isn’t done properly which presents a variation gold mine.
    2). Services and infrastructure coordination of adjoining projects isn’t done properly or in some cases even attempted.

    Managing some existing infrastructure that they need to work around I’m getting to see this $ train wreck unfold first hand.

    This is on on top of the fact that they executed projects that had been through 50 years of feasibility studies and had never previously got up, not even under Joan Kirner.

    Dickhead Dan makes Joan Kirner look like a competent financial manager…. incredible.

  38. GregJ says:

    25% cost blowouts in construction are relatively low. I mean, look at how much the Libs are spending on the War Memorial, that has blown out by a lot more!

    Only a moron with no experience in construction contracts would state such a thing.

  39. Mike Ryan says:

    Equally useless. That’s inclusive.

  40. Chris M says:

    One can only hope. They need to receive what they voted for.

    Less electricity use, fewer cars on the road, house price crash would make housing more affordable for refugees and the junkies shuffling about Richmond…. so much winning if you are a lefty.

  41. DaveR says:

    Is Australia already in the grip of an inflation surge? If not yet, it surely will be when (not if) mortgage interest rates turn upward. And the CPI index, a major measure of inflation, does not use all of the costs of housing in its calculation: it doesnt include land costs, it only captures owner occupied housing, and it doesnt include capital repayments of principal+interest mortgages.

Comments are closed.