Boasting that Victoria is Australia’s fastest growing State and continuing the “getting on with the job” theme of last year’s budget, Treasurer Tim Pallas handed down his budget speech on 2 May 2017.

Headline items from the Budget are:

  • an operating surplus of $1.2 billion in 2017-18 and surpluses averaging $2.4 billion a year over the forward estimates to 2020-21
  • retention of the triple-A fiscal rating
  • continued infrastructure spending of $9.6 billion a year over four years, creating over 50,000 jobs
  • $4 billion investment in regional Victoria
  • $2.9 billion for world-class health care

With the next State election due in 2018, the government added to the unprecedented spending announced in 2016-17, by announcing substantial additional spending on the health system, infrastructure, education, social responsibility, the regions and the justice system. Overall, the spending in these key areas is likely to be well received by business.

However, the government has also announced substantial changes to State taxes, many of which will have a negative impact on property investors. Unlike the 2016-17 State taxes changes which focused on increasing the duty surcharge payable by foreign investors and the land tax surcharge levied on absentee (foreign) owners, many of the changes announced by the government also affect local property investors.