A couple of economic and fiscal developments in recent days have reinforced the importance of the Victorian 2019-20 budget update, due in early December.

Treasurer Josh Frydenberg. Credit:AAP

This week, Victoria and New South Wales called upon Treasurer Josh Frydenberg to expedite infrastructure projects. That was followed by revelations that the Victorian government is looking to sell off 151 publicly-owned sites around the state in a divestment program likely to raise many hundreds of millions of dollars.

In the lead-up to the budget update, we are entitled to ask the state government whether there is anything it's not telling us about the true state of the finances. There are certainly a number of portents suggesting that the government’s forecasts on debt ($39 billion this year), efficiency dividends ($1.8 billion in projected savings) and projected surpluses ($1 billion this year) may not be met. Victoria’s call for accelerated infrastructure spending by the Commonwealth government is particularly interesting. I support it but don’t think the state government has equipped the sector to meet the challenges it will impose. I also think Victoria and New South Wales should be seen in very different contexts.

As anyone in the industry will tell you, Victoria’s construction sector is at capacity. And, to be fair, while the government can with some legitimacy claim that it was returned to office partly because of infrastructure spending, this does not mean that the delivery of major projects has been as successful as it could have been for Victorians.