The leadership challenges for Victoria in 2015

THE ECONOMY

The new Victorian government faces significant constraints to its budget with a weak economy and budget promises. At the same time, new policy initiatives are required to provide an attractive environment for business investment, more jobs, and continuation of Melbourne’s reputation as “the most liveable city” to reside.

Victorian economic growth at 1.7 per cent over the past year is half the national average, and unemployment at 6.8 per cent of the workforce (with as many again wanting to work more hours) could rise even higher.

The incoming government has promised not to introduce new taxes or raise existing taxes, to maintain a budget surplus and the state’s AAA credit rating, though there are real risks of revenue costs with the write-off of the East West tunnel project. 

A combination of promised extra outlays on the national disability support scheme, Gonski reforms to education and infrastructure investments, together with changes in demography and health care technology, imply increased outlays. 

The constraints on available funds and additional expenditure commitments will require the government in its budgets to explicitly and transparently assess spending priorities, and to implement new technology and management practices to get better value per dollar of government expenditure.

State government policies can contribute in a number of ways to improve the attraction of Victoria as the location for footloose businesses to invest and to create jobs in the context of an evolving global economy. Transparent and simplified regulations for property rights and to correct significant market failures, infrastructure to support business productivity and to complement business investment, flexible labour markets to support innovation of new products and technology, education for a skilled workforce, and budget integrity and openness can all make Victoria a more attractive location. Infrastructure Victoria will be vital to help in prioritising different infrastructure investment options, and in securing finance.

Reforms to the government supply of education, health, law and order, and infrastructure will be required to sustain the liveability of cities and rural Victoria. 

John Freebairn, Professor of Economics, Faculty of Business and Economics

EMPLOYMENT

The incoming Andrews Labor Government has committed to getting Victoria ‘back to work’. On being sworn in, it will bring in the Back to Work Act as a signature piece of legislation in its first term. A major plank of the Back to Work agenda centres on investment in new infrastructure, including a minimum investment of $1 billion in upgrading regional roads and a re-direction of the Commonwealth’s multi-billion dollar commitment to the East-West tunnel construction in Melbourne, which will now be abandoned.

While the details of this piece of legislation are yet to be confirmed, it will enable the implementation of a number of core policy promises made during the campaign, including the establishment of:

A number of new industry advisory bodies, including Infrastructure Victoria, Projects Victoria, and the Premier’s Jobs and Investment Panel, to advise on priority infrastructure investments.

A $500 million fund to invest in new projects and support job creation in growth sectors.

A $200 million Future Industries Fund to support the accelerated growth of priority sectors, which include medical technology and pharmaceuticals, new energy technologies, food and fibre, transport, defence and construction technologies, education and professional services.

A $200 million Regional Jobs Fund.

A $100 million fund to provide payroll tax relief for businesses employing the long-term unemployed, workers who have been retrenched, or young workers currently unemployed.

The Back to Work policy will also look to expand Victoria’s investment and business promotion activities globally through the expansion of new Victorian Business Offices in South America, Singapore and Turkey.

These initiatives will need to operate alongside the Commonwealth’s recently-announced Industry Innovation and Competitiveness Agenda, much of which echoes the approach to be pursued by an Andrews Labor Government. However, the Commonwealth has already set its sights on pursuing further labour market/industrial relations reforms, as well as other legislative reforms that are likely to present significant points of difference between the incoming Victorian Labor government and the Abbott government nationally.

Peter Gahan, Director of the Centre for Workplace Leadership, Faculty of Business and Economics

HEALTH

On the front cover of the Victorian Labor Party Policy for the recent election is an elderly woman in hospital. The polls have consistently shown that voters trust Labor more than the Coalition on health. So it is obviously most important for the incoming Andrews government that the new Minister for Health does, and is seen to do, a very good job. But health is not a fun gig. The easiest job in politics is being the Opposition Health Minister. The hardest is being the Health Minister.

I do not envy the incoming Health Minister Jill Hennessy. She will be burdened with a long list of promises which include a new Women’s and Children’s hospital in Sunshine, a major expansion of Casey Hospital and a new Heart Hospital in Clayton whilst at the same time cutting emergency room waiting times, elective waiting times and ambulance waiting times. 

But the Health Minister, like David Davis the previous incumbent, will have to confront the ever-gathering, three-pronged ‘perfect storm’: increased, almost insatiable community demand for healthcare; increased physician demand for provision of the latest treatments; and expectations of an ever-increasing supply of more expensive diagnostic equipment, patient management aids and pharmaceutical therapies.

This is compounded by a withdrawal of funding by the Commonwealth. The Victorian Healthcare Association predicts that the states will receive up to $50 billion less for public hospitals up until 2024 under the new funding formula announced in the May 2014 budget. In addition to this we are already seeing, according to Stephen Duckett from the Grattan Institute, cost-shifting of $1.5 billion from the Commonwealth Government to patients and consumers over the first 12 months of the Abbott government, which will have the greatest impact on the poorest.

I wish the new Health Minister all the best!

Rob Moodie, Professor of Public Health at the Melbourne School of Population Health

EDUCATION

Traditionally, education and health have been seen as Labor strengths, and voter expectations are likely to be high of the Andrews Labor government.

The challenges facing Labor are significant, particularly in a tight fiscal environment. Chief among these is rebuilding of the TAFE sector, which is still reeling from earlier cuts, and for which a clear vision of well-resourced but sustainable vocational education and training provision needs to be built. While responding to local concerns is important, the details of the big picture on what TAFE can realistically deliver across the state have yet to be filled in.

Tempting as it may be to try to differentiate, it’s important for incoming governments to quietly retain the good policies of their predecessors. Australia faces declining student achievement in sciences, technology, engineering and maths (STEM) in school, low rates of STEM tertiary enrolments, and relatively high numbers of non-specialist maths and science teachers. Maintaining some previous policies, such as those supporting teacher professional learning in STEM and the attraction of staff into STEM teaching roles, will be vital.

In education there is a pattern of incoming governments making large structural changes, often flowing from ideologies rather than any serious research base. So, for example, the Coalition government on taking power made significant structural changes to the central Department of Education and Early Childhood Development office, amalgamated the regional offices, and devolved decision-making to schools. Left-wing governments, in contrast, may centralise administration. There is often a lack of research evidence that any of this has a major impact on student outcomes; worse, it consumes resources and breeds cynicism and weariness in teachers and school leaders, who shrug their shoulders at being on the restructuring merry-go-round yet again, unable to identify where to find help for a particular student or advice on how to tackle a difficult situation. Particularly given the short time lapse since the last set of changes, the incoming government should make structural changes based only on substantial concerns voiced by schools and sound research evidence.

Finally, the government needs to ensure it keeps a strong focus on improving teacher quality and develops a clear vision for professional learning priorities for teachers. Ensuring the system attracts the best possible teachers and then provides them with quality evidence-based professional learning, and works hard to retain good staff, will be essential if we are to improve the quality of students’ learning and support them to flourish.

Suzanne Rice, Melbourne Graduate School of Education

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About the Election Watch.edu.au project

Election Watch is an initiative of the University of Melbourne devoted to expert political analysis and debate; to the exploration of vibrant democracy; and to explaining the mechanics of democratic process. 

In the past years Election Watch has launched projects focused on the 2013 Australian election, the 2014 Indian and Indonesian campaigns, and the November 2014 Victorian election. 

Election Watch draws on the resource of the University of Melbourne’s experts to comment and analyse issues on their home turf, encouraging voters to engage deeply with the issues that shape their lives.

Election Watch brings together the University of Melbourne’s most respected and experienced academics to provide rigorous analysis and independent commentary on the Victorian election campaign – from political scientists and public policy experts to specialists in health, education and urban planning.