State final demand – a key measure of the economy that combines public and private investment and spending – grew by 4%, to be more than 11% higher than in 2018-19. This growth was driven by consumer spending, which rose by nearly 7%, and business investment, which rose by 8%.
A growing population helps to build the economy and Victoria’s population growth is above pre-pandemic rates. Victoria’s population rose by 2.4% or more than 160,000 people over the year to March 2023 – the biggest increase in absolute terms of all the states – taking our population to 6.8 million people.
A strong economy has driven a very strong labour market with more than 130,000 Victorians joining the workforce over the past 12 months – the best performance in the country. Victoria now has the lowest unemployment rate in the country at 3.5% and employment levels are around an all-time high at 3.65 million.
The Annual Financial Report shows that the net operating cash surplus was $4.3 billion, a $13.1 billion improvement on the deficit from the previous year, confirming that the Victorian State Government achieved step two of the four-step fiscal plan unveiled during the pandemic to enable a sustained recovery.
The 2022-23 operating result was an improvement of $1.5 billion compared with the revised estimate in the 2023-24 Budget.
Total general government sector expenses reduced to $93.6 billion in 2022-23, a decrease of $3.2 billion compared with the previous year, reflecting the unwinding of COVID-19 support payments.
Net debt is $3.5 billion lower than the target in the 2022-23 Budget, and $17.8 billion below the forecast in the 2020-21 Budget, at $115 billion. Net debt has been lower than forecast at each budget since the onset of the pandemic.
State government investment in infrastructure has increased from $4.6 billion in 2014-15 to $21.8 billion for 2022-23 to support Victoria’s rising population, with new housing, transport, education and health projects on the way.
State government-backed infrastructure projects have kick-started careers for thousands of workers and the creation of Free TAFE has produced a pipeline of skilled workers.
Victoria’s economic outlook is positive, with Deloitte Access Economics forecasting Victoria’s economy will grow faster than any other state over the next two years.
