The Andrews government is positively chuffed about the state of the state economy.
Understandable enough. Economic growth is at least one tangible benchmark of political success. And on this measure, Victoria is now jostling with NSW for top spot.
Illustration: Andrew Dyson
As CommSec's State of the States report this week noted, Victoria is growing at a nominal annual clip of 5.4 per cent, the fastest in the nation.
During the three months to the end of June, the real value of construction work completed in the state was 19.9 per cent higher than than average for the decade, retail spending was 14.2 per cent higher and home lending was 11.5 per cent higher.
For many in Melbourne, the lived experience is one of increasing frustration.Credit:Paul Jeffers
Another report, ANZ's Stateometer, singled Victoria out as the only state with above trend and accelerating economic growth.
State Treasurer Tim Pallas was sufficiently delighted so as to tell State Parliament on Tuesday: "These are the dividends you get when you invest in the Victorian economy and in Victorian infrastructure, and that is despite the headwinds from Canberra."
Fair enough. But there is an inconvenient truth behind the result. Victoria's recent growth performance has been largely underpinned by booming population growth.
When it comes to adding people, Victoria is leaving the rest of the nation for dead. Over the year to March, the state's population swelled by 1.94 per cent, passing the 6 million mark for the first time. NSW was next on the list, growing by 1.36 per cent, followed by Queensland, up 1.30 per cent.
The annual increase for Victoria was about 8.4 per cent higher than the decade average. The state is now gaining the equivalent of more than 2200 people a week, or 114,900 over the year.
Overseas migration made the biggest contribution, adding 62,800 people. The rest came from natural increase (births minus deaths), which added 37,600 new residents, and net interstate migration, which added 14,500.
By 2024 – in just eight years – Victoria is on track to grow by another million people to pass the 7 million mark. Whether you think this is a good thing or not is a matter of perspective. In one sense, population growth is a symptom of success. People are attracted by job opportunities and lifestyle. But in another sense, it carries enormous costs.
For now, the Andrews government, perhaps a little unsure how to respond, is treating the population surge as a political virtue, albeit one that must be managed. I'm not so sure.
These days the concept of the "lived experience" is all the rage in political circles. The theory is that if a political narrative and corresponding policies dovetail with voters' actual daily experience, it will cut through incisively.
For many in Melbourne, the lived experience is one of increasing frustration. Frustration over traffic snarls, over long hours spent travelling to and from work, over heavily stretched health and education services, over surging housing costs, over rising crime rates and trains full to bursting point.
I suspect many voters are starting to single out Victoria's population surge as a common denominator to their frustrations.
The state opposition is preparing to tap into this (presumably focus group-tested) sentiment, with the energetic member for Kew, Tim Smith, preparing a population policy expected to focus on shifting more people to Victoria's regional towns and cities.
Economic growth is all very well – and yes something to crow about politically – but if the spoils are being carved up among a growing number of people, the question of whether or not we are better off becomes murky, particularly after you factor in intangible costs.
In 2014-15, Victoria grew by a mere 0.7 per cent in per capita terms (equal second-worst state result in the nation). In the two years prior to that, growth per person went backwards.
The outpouring of public anger over a brazen decision by property developers to raze the historic Corkman pub in Carlton with no planning permits was perhaps a reflection of a bigger concern that has lodged in the public collective consciousness.
It is the idea that cowboy developers are riding roughshod over Melbourne and its planning rules to enrich themselves, rather than the city more broadly.
I suspect voters are also starting to join the dots when it comes to the link between population growth and housing affordability. Federal Treasurer Scott Morrison this week attempted to blame the states for the problem, warning he will push the states to overhaul planning rules he says have been preventing or delaying new houses being built.
But for Melbourne at least, a lack of land for new houses does not seem to be the main problem. It is building the infrastructure needed to cope with growing numbers of people flung to Melbourne's fringes who spend hours each day travelling to and from work, while struggling to access basic services.
Population growth may mean more retail activity, more construction work and more investment and more tax revenue, but if governments fail to provide the extra infrastructure and services, what is the ultimate point?
The growth it produces may give the government something to crow about in the short-term, but what about the longer term political and social costs?
The population debate is a discussion the Andrews government seems to have placed in the too-hard basket. For now, it is simply happy to trumpet the economic growth it produces as a political virtue. And to be fair, the main lever for controlling it – the national annual migration intake – is beyond its control.
But I think public sentiment has now reached a point where political leaders ignore the issue at their own peril. At the very least, it is surely time for the Commonwealth to tap the brakes on the annual migration intake to give the states a chance to catch up on the infrastructure and services needed to cope.
Josh Gordon is State Political Editor.