As the spindoctor for Jeff Kennett’s Treasurer Alan Stockdale from 1992 until 1994, my greatest triumph was The AFR poster after the 1994 state budget which read: “Victoria’s economic miracle”.

The budget received glowing coverage across the board, largely because we invited 40 business journalists and commentators in for a private dinner the night before at which eight Cabinet ministers presented the most comprehensive summary ever provided of the extraordinary Kennett revolution.

John Brumby’s spindoctors will be feeling similarly pleased this morning after The AFR splashed today’s paper with: “Victorian budget win for business”. This involved quadrupling the annual tax cuts to come up with a figure of $1.4 billion. You had to read George Megalogenis in The Australian to discover that new Victorian Treasurer John Lenders was only giving back a fraction of the windfall tax gains from Victoria’s completely unsustainable housing bubble.

It was arguably reckless for Lenders to offer any cuts in the rates or thresholds of payroll tax, stamp duty and land tax given that Victoria is once again being run by a big-spending Labor Government that is hurtling down the path of burgeoning debt and deficits.

Not that you would get an accurate picture of this reading our two national newspapers. The Australian’s front page story talked about a “healthy surplus of $828 million”, while at least The AFR more accurately described it as an “operating surplus”.

Truth be know, the Victorian budget should be like the Commonwealth’s version which includes capital items before declaring a final surplus or deficit. Using this method, annual deficits will average about $2 billion over the next four years. This is why you need to look at the borrowing program to get an accurate picture, but the Brumby government has mesmerized the hacks with that rort known as “net debt”.

The AFR’s front page declared Victoria was facing “a near quadrupling of total government net debt to $22.9 billion by 2012”. This would suggest net debt is currently about $5 billion, but the “at a glance” on page 13 declared “net debt $2.3 billion at June 2008”.

Contrast all this with The Australian which at least dedicated a page lead to the debt issue but produced this in the second paragraph: “Treasurer John Lenders played down the increase in net debt predicted in the state budget from $2.3 billion next month to $9.5 billion in June 2012.” How can our two national dailies come up with a $13.4 billion disparity in the net debt figure for 2012?

The net debt claim is actually the biggest lie of all because this chart from Treasury Corporation of Victoria shows that state debt is currently sitting at about $13 billion. The big challenge for Lenders is to show us where he’s got $11 billion of unencumbered cash that allows this claim that net debt is only $2.3 billion.

Truth be known, it doesn’t exist. There might be a few billion sitting around, but it is actually pledged for other liabilities such as public service super, workers’ comp and road accident victims.

Victoria’s “net debt” claims are a fundamental Enron-esque accounting fraud involving double counting. Directors of ASX listed companies who tried this would go to jail.