Delivering his first Budget as Treasurer of the Andrews’ Government, Tim Pallas has ensured that Victoria continues to set the benchmark for delivering strong budget surpluses, AAA rated finances and much needed expenditure on productive assets. The Treasurer today confirmed that the Victorian Government will increase the level of state expenditure growth to 3 per cent in order to fund specific election commitments early in their term of Government, whilst at the same time strongly investing in improved social services such as education and health. The Budget also provided further clarity on significant infrastructure projects announced prior to the Budget.
The theme of the Government’s 2015-16 Victorian Budget, “For Families”, recognises that a successful Budget package needs to combine both big ticket infrastructure commitments in public transport and roads with community initiatives in health and education. This strategy has seen Treasurer Pallas move away from a single budget centrepiece, instead delivering targeted measures across the Victorian economy.
This budget effectively reduces the projected surplus of the former Coalition Government from $2.2 billion to a more modest yet substantial $1.2 billion for the next financial year, growing to $1.8 billion by 2018-19. The Treasurer has signalled that Labor is prepared to “do things differently” when it comes to managing the balance between spending and growing surpluses, where the revenue side has received unexpected gains from increased property taxes and via dividends from Victorian public entities.
Stabilised Budget surpluses are predicted in an environment of modest economic growth, where net debt to gross state product (GSP) is forecast to fall from 5.5 per cent in June 2015 to 4.4 per cent in June 2019, maintaining the Victorian Government’s AAA credit rating
The Budget also emphasises a reduction in unemployment from 6.5 per cent in 2015-16 to 5.75 per cent in 2018-19 and includes the election commitment of $508 million for a Jobs and Investment Panel to allocate funding for areas of jobs growth of 100,000 new jobs in four years.
Medium to small infrastructure programs have received funding across the State to create activity in the construction industry within this Budget. In particular, a total of $730 million has been allocated across the forward estimates to restore dilapidated school buildings, including money to purchase land in growth areas for future schools. $350 million will be spent on TAFE, including reopening closed TAFE campuses. $560 million is allocated to building and rebuilding hospitals in growth corridors. Indeed, population growth has been acknowledged as a particular budget priority over the next four years.
The Budget confirms how the Government will progress major infrastructure projects, including:
- The announcement of $1.5 billion in funding for the Melbourne Metro Rail Project to cover all anticipated planning, design and significant early work ahead of major construction of the Project to begin in 2018.
- $2-$2.4 billion over the next four years to begin the process of 50 level crossing removals.
- A payment of $339.8 million to the East West Connect consortium to settle and therefore not proceed with East West Link.
- The CityLink Tulla Widening Project gets the go-ahead, with the Victorian Government providing $72.8 million and the Australian Government providing $200 million to the $1.3 billion project due for completion in 2018.
- $600 million to build new E-Class trams, build 21 new V/Line trains and refresh the existing Comeng fleet and B-Class trams.
- $210 million to expand the Melbourne Convention and Exhibition Centre by way of a stage-two expansion.
- $110 million to duplicate the Chandler Highway bridge over the Yarra River near Fairfield.
The Budget also provides funding for rural and regional Victoria through health, education and jobs funding specifically for these regional communities. These communities will receive funding for a further 450 country firefighters, as well as $33.5 million for 70 new CFA trucks. Ballarat will receive $10 million for an urgent cardiac catheterisation laboratory at Ballarat Base Hospital. Gippsland, Bendigo, Geelong and Ballarat will each receive a new Tech school for vocational studies.
The Premier and Treasurer also reconfirmed their intention to enter into a medium-term lease over the operations of the Port of Melbourne.