The Victorian State Government handed down its Budget on 6 May 2014.

Overall, Victoria appears to be in a very healthy position. The headline items from the State Budget are:

  • an expected operating surplus of $1.3 billion in 2014-15, continuing over the next few years
  • the economy is expected to grow by 2.5 % in 2014-15, rising to 2.75 % in the medium term
  • net debt of 6.3 % of Gross State Product in 2014-15 to fall to 4.5 % by the end of the forward estimates 
  • the unemployment rate is expected to ease to 5.5 % over the forward estimates period

Major announcements
Major announcements from State Budget included:

  • transformational investment of up to $27 billion in new infrastructure to better integrate Victoria’s rail and road network, and social infrastructure. Key projects of this investment include:

    Melbourne Rail Link (incorporating the Airport Rail Link) = $8.5 to $11 billion
    Cranbourne – Pakenham Rail Corridor Project that will boost capacity by 30 % and remove four level crossings and plan the removal of a further five = $2 to $2.5 billion
    East West Link – Western Section providing an alternate route to the West Gate Bridge - $8 to $10 billion
    the CityLink – Tulla widening project in partnership with the private sector = $850 million

  • $1.2 billion per year to vocational education and training to enable workers to take advantage of new opportunities in the economy
  • an additional $2.8 billion to schools over five years, including $564 million to both government and non-government schools to improve student outcomes
  • an additional $1.4 billion to hospitals and the health system over four years, including $60 million to boost health service capacity in 2014-2015 over the winter peak

Social responsibility

  • $86 million to reform the adult parole system to ensure community safety
  • $49.5 million to be spent on new equipment for Victorian Fire Services, including the replacement of all respiratory protection equipment and the purchase of 78 new CFA vehicles
  • $29.5 million over four years for child protection services to assist vulnerable families
  • $13.4 million for the prevention of domestic and other forms of violence

State taxes

  • The payroll tax rate of 4.90% will decrease to 4.85% from 1 July 2014
  • The motor vehicle transfer duty rate will increase by $0.40 per $200 (or part thereof) of the dutiable value of vehicles transferred on or after 1 July 2014 and before 1 July 2015
  • Stamp Duty on life insurance policies will be abolished from 1 July 2014