The Kennett Government had to undertake one of the most daunting tasks possible for an incoming government after the disastrous failures of the Cain/Kirner Labor government, which had seen scandals surrounding the Victorian Economic Development Corporation (VEDC) and the collapse of the State Bank. Victoria was effectively bankrupt and the budget had a multi billion dollar budget deficit.
In just 7 years the Kennett Liberal Government turned Victoria around and left the state revitalised. By 1999, Victoria had regained the title of Australia’s leading state. Whereas under Labor people were leaving Victoria in search of opportunities elsewhere, by the end of the 1990s they started to return along with many others keen to take advantage of a rejuvenated state.
In all areas of government the Kennett team had to remake Victoria and restore the confidence of the State. Getting Victoria’s finances back on track was the greatest achievement of the Kennett Government. Between 1992 and 1999 the state’s finances were restored – with Labor’s debt of $32 billion being reduced to just $6 billion. Employment increased by more than 270,000 jobs to a record level of 2,202,900 and unemployment was cut by a third.
Labor had left Victoria with a budget deficit of $2.1 billon in 1992, leading to a cut in the state’s credit rating, putting pressure on the government’s ability to provide even the most basic of services and causing GDP growth to shrink to -1.5 per cent. The Kennett Government stopped Victoria’s slide and got Victoria moving again. Alan Stockdale became the first Treasurer in the post-war period to introduce four successive surplus budgets. As a result of the Kennett government's sound economic management the state’s AAA credit rating was restored, Victoria was growing at a rate of 5.3 per cent and by 1999 the state budget was $1.7 billion in surplus.
With the state’s finances restored, investment into Victoria returned with businesses experiencing 4.3 per cent of positive growth. This private investment allowed the Kennett Government to invest in major projects such as Federation Square, the new Melbourne Museum, the new Melbourne Exhibition Centre, the CityLink road network, new and upgraded freeways (the Eastern Freeway extension, the Metropolitan Ring Road, Geelong Freeway upgrade), the development of the Docklands Precinct (including the construction of the Docklands Stadium) and the continued development of Southbank, including the Crown Entertainment complex.
In areas like education, health and community safety, the Kennett Government was spending more money more efficiently and introducing vital reforms to better meet the needs of Victorians.
The Kennett Government is still the only State government in Australia of recent decades to face up to the need to rebuild community and parental confidence in the public school system, introducing self-governing schools in the government sector. Though supported strongly by school communities, this important reform was abolished by the Bracks government almost immediately on coming to power as a result of union pressure. A restructure of the education system allowed vast resources to be allocated into improving the infrastructure of schools, giving them better equipment and providing more comprehensive training for Victoria’s teachers.
By 1999, Victorian hospitals treated 200,000 more patients than they did in 1992 and the government had commenced work on a number of new hospitals in areas like Knox, Berwick, Lorne and Mildura. 1999 Bureau of Statistics figures showed that Victoria had the lowest level of victims of household and personal crime, making it the safest state in Australia.
The principles of good government and the policies implemented by the Kennett Government helped to deliver sustained growth and a better quality of life for all Victorians. Victoria was transformed into a vibrant, exciting place to live and once again people could be proud to be Victorians.