Victorian State Budget 2015/16

The Daniel Andrews led Labor State Government handed down its first Budget yesterday, Tuesday 5 May 2015.

Victoria’s economic outlook is positive and the State has maintained its triple-A credit rating. The headline items from the Budget are:

an operating surplus of $1.2 billion in 2015-16, growing to $1.8 billion by 2018-19
expected economic growth of 2.5% (up from 2.25% in 2014-15)
reduction in net debt to 4.4% of Gross State Product by June 2019
reduction in unemployment from a forecasted 6.5% in 2014-15 to 6.25% in 2015-16
growth in total taxation revenue by 4.1% to $19 billion in 2015-16

Major announcements

Major announcements from the Budget included:

investment of $9 - $11 billion in the Melbourne Metro Rail Project that will include two nine-kilometre underground rail tunnels (construction to commence by 2018)
commitment of $5 - $6 billion to remove 50 of Victoria’s most dangerous level crossings over eight years
$574 million to relieve road congestion
$560 million to build and rebuild hospitals in fast growing areas throughout Victoria
investment of $2.9 billion in schools, including $688 million to deliver new schools as well as renovate and refurbish 67 schools

Social responsibility measures included:

$250 million to strengthen the child protection and family services systems
$81.3 million to support the work of the Royal Commission into Family Violence and to strengthen response services’ capacity and capabilities
$45.5 million to fund the Ice Action Plan to reduce the supply, demand and harm caused by ice
$148.6 million on 400 custody officers to guard prisoners at police stations across Victoria, freeing up 400 police officers for front line police duties

State taxes measures included:

a 3% surcharge payable by foreign buyers of residential property in addition to stamp duty (applicable to contracts entered into on or after 1 July 2015)
a 0.5% absentee landowner surcharge, payable by landowners who do not ordinarily reside in Australia, in addition to any other land tax payable (applicable from the 2016 land tax year)
an exemption from stamp duty on vehicles classified as mobile plant (under 4.5 tonnes) and plant-based special purpose vehicles (over 4.5 tonnes), such as excavators, bulldozers and tractors (applicable from 1 July 2015)

Tony Windle, National Head of Indirect Tax, E tony.windle@au.gt.com T +61 7 3222 0381