Many years ago, as a result of the economic failures of the Cain Government in the 1980s, Victoria had a poor reputation for economic management, while Queensland had an excellent reputation. A comparison of State Budget estimates for 2014-15 (see chart below), which the ABS published on a consistent National Accounts basis yesterday, shows just how different things are today, with Victoria leading Australia in terms of the net operating balance (i.e. the difference between revenues and recurrent expenses, not including capital expenditures, which push total net lending into deficit).

It strikes me that Victoria’s policy settings are superior to other states in many areas, including in environmental management and planning, which has likely improved the livability of Melbourne and Victorian regions relative to the rest of Australia. That may explain, in part, why Victorians are staying put and no longer moving to Queensland (in net terms, as shown in the chart below). Indeed, as I’ve noted previously, Victoria is now actually gaining a small amount of people from Queensland (in net terms).