The Treasurer Tim Pallas today tabled the 2014-15 Financial Report, confirming Victoria’s strong budgetary position and steady economic growth.

It showed that Victoria’s economy grew steadily in 2014-15, with state final demand growing by 2.7 per cent in 2014-15, and employment rising by 2.1 per cent – the strongest result of the mainland states, above the national average of 1.2 per cent, and, the strongest outcome since 2010-11.

It also confirms a surplus of $1.2 billion for 2014-15, more than $300 million higher than the revised estimate, with strong surpluses forecasted every year over the budget and forward estimates.

The Treasurer noted that the 2014-15 Financial Report contained two qualifications made by the acting Auditor General regarding:

• Commonwealth funding for the East West Link project
• Recording of property, plant and equipment at the Department of Education and Training.

The first qualification relates to whether Victoria was obligated to return the $1.5 billion set aside for the East West Link simply because the then Abbott Government took an arbitrary decision to demand its return.

Advice provided to Treasury states that no liability is or was required to be recognized, as the funds were on Victoria’s books and would not be returned. This accounting treatment was confirmed by independent accounting firm Ernst and Young, and legal advice from a Queen’s Counsel.

The Federal Treasurer, Scott Morrison, also recently confirmed Victoria’s long-held position that the money will stay in Victoria and go towards productive infrastructure projects that our state needs and voted for.

The second qualification refers to issues first flagged by VAGO in 2013/14 around the Department of Education’s accounting records. This relates to the need to improve poor record keeping and follows concerning revelations at IBAC about the culture of the Department.

The Department is in the process of implementing an improved asset management system, as part of a comprehensive reform of its governance and culture.

Attributable to the Treasurer, Tim Pallas

“Victoria’s strong economic performance has been confirmed today, with our jobs growth the strongest of any of the mainland states. Victoria’s economic growth is steady, the state is in surplus, and will stay in surplus under an Andrews Labor Government.

“The Auditor-General’s qualification on the East West Link funding runs contrary to the facts and the advice from the DTF and Ernst and Young – the money was on Victoria’s books, and was always staying there, to be used for infrastructure that Victorians need and voted for.”

Attributable to the Minister for Education, James Merlino

“I have spoken with the Auditor General regarding the disclaimer opinion and also met with him today, along with the DET Secretary to ensure this is not repeated.”

“I will ensure the Department works closely with VAGO throughout the course of this year to make sure all effort is made to prevent this from happening again.”