The Victorian government is holding onto a $2.3bn election war chest, as it drops a pre-poll budget with scant few cost of living relief measures.
Having already made $2bn of spending announcements before budget day – free public transport for two months, and then half-price for the rest of the year, as well cutting light car registration fees – Treasurer Jaclyn Symes described having to rein in expansion of government programs.
With the state’s huge debt pile costing $21.5m per day in interest ($6.8bn each year), the Victorian government is banking on a “rebound” in residential land values to pump cash into the coming years’ budgets.
The government is betting on tax revenue lifting an average of 5.1 per cent over each of the next four years.
At the same time, and with an election looming in November, the coffers are chocked with $2.3bn of unallocated funds.
“It’s really hard to balance priorities, I don’t dispute that, when you have passionate cabinet members that have their own portfolios … they want to make them bigger and better and do more for more people,” the Treasurer told reporters on Tuesday.
“We have continued to fund the services, particularly the front line services within those portfolios. Wanting to make them bigger and expand them more, that’s where we’ve had to lighten off a little bit.”
The state government announced all its major spend-ups in the week before Tuesday’s budget.
The government found $50m for planned surgeries for children, $5m for mental health support in bushfire-affected areas, and $102m to upgrade triple-0 call centre infrastructure.
To feed families struggling to put food on the table, $11.2m was allocated, as was $76m (matched by Canberra) for more trains out the far western suburbs.
There is also an extra $256.4m earmarked for hospitals, a $13.7m boost for WorkSafe, and $43.4m for IVF.
The state’s investment in film production will also be almost-doubled, with an extra $27m.
“This year’s budget we’re spending $17.7bn. Last year’s budget we spent $27bn. This is a constrained budget. This is a responsible budget.
“We made our decisions to do exactly what we thought was the right thing to do in a tight fiscal environment.”
The state of Victoria is sitting on $165.4bn of net debt. This figure is forecast to hit $199.3bn in four years.
Fielding questions from the media, Ms Symes failed to put a figure on how much the state’s debt had been paid down this past year.
The Treasurer instead stressed the debt had “stabilised”, and had ticked down as a percentage of the economy.
Asked again to share a dollar figure on how much the debt had been paid down, Ms Symes drew a housing analogy.
“If your mortgage is less than half your annual wage, generally you’re doing okay.”
Cost of living fuelling budget spend
The budget – which has been somewhat lacklustre for an election year – put a lot of focus on the ongoing cost of living crisis, which Ms Symes said was a key factor in developing the final figures.
“We know the cost of living pressure has been … an issue for most Victorian families,” she said on Tuesday.
The ongoing war in the Middle East had only exacerbated the strain on families’ finances.
“War in the Middle East is putting household budgets under extra pressure,” Ms Symes said.
Some of the perks of the budget have already been announced weeks before, such as the free public transport for Victorians, which will wrap up at the end of May.
From June 1, public transport fees will be cut in half until January 1 2027, with the total cost to shoulder the scrapped public transport fees about $432m.
‘Determined’: Housing spend increases amid growing need for social housing
The cost-of-living crisis has continued to impact Victorian households, with the state offering “responsible” investments into social housing and limited cost-of-living relief.
As part of the budget, about $1bn will be invested into securing more housing and acquiring land to expand for more emergency accommodation.
Of the $1bn, about $860m will be injected into the Social Housing Growth Fund, which is aimed at developing more social housing across the state over the span of five years.
The five-year spend will go towards building a further 7000 social housing homes over the span of a decade.
Currently, there are about 77,500 households relying on social housing across the state, with about 44,000 still stuck on the waiting list.
The Victorian government has rolled out 12,000 social and affordable housing units across the state as part of its goal of 16,000.
As part of its Tenancy Program, $6.1m will be injected into programs to prevent renters of the social housing from entering homelessness.
Housing and Building minister Nick Staikos said: “Every Victorian deserves the dignity that comes with a home that is comfortable and safe. That’s why we’re making these important investments in this budget.”
A further $26m will be injected into emergency accommodation, as well as nine new outreach teams for expanding services to rough sleepers.
The budget will allocate $15m to providing stable housing for those experiencing homelessness in Seddon, Melbourne, St Kilda, Shepparton and Mildura.
Ms Allan said she was “determined” to help the Victorian families who are living ‘under pressure”.
About $37m of the budget will be allocated to unlocking and expanding the number of houses across the state’s greenfields, including $11m to cut red tape and allow faster approvals across the state’s planning legislation and systems.
State tackles increasing youth crime rate
Another issue Victorians have faced over the past 12 months is the increasing crime rate, which has skyrocketed 4.2 per cent compared to last year.
Youth crime has been the key driver of theft across the state – an issue the state is hoping to tackle by investing $81m into youth crime prevention.
Of this, $23m will be injected into supporting and re-engaging students that are transiting between leaving juvenile centres and school.
A further $5.5m will be invested into the South Sudanese Australian Youth Justice Expert Working Group.
