Andrews and Pallas go for broke in $49 billion spending spree to reboot Victoria’s battered economy
Victorian Premier Daniel Andrews and Treasurer Tim Pallas today unveiled an unprecedented big-spending budget driven by big transport and health infrastructure and aimed squarely at creating jobs. It’s a bold gamble to recover Victoria’s pre-COVID position as the country’s leading growth economy. Forecasting debt to reach $155 billion across the forward estimates, the Government has bet on their ability to power economic growth while debt is cheap.It is counting on population growth to go back to the strong numbers before the virus to help drive growth.
Headlined by $5.3 billion for social housing, the long-awaited Melbourne Airport Rail and Suburban Rail Loop Phase One, and a $619 million Jobs for Victoria plan, this is a Government-financed reset for the Victorian economy. In the words of the Treasurer, the times “demand a budget like never before… a triumph of hope over fear”. The government is also seeking to build on Labor’s social policy strengths and is investing heavily in social housing, health, and education.
Jobs, jobs jobs
With state tax revenue falling 11.3 per cent and unemployment at 7.4 per cent following COVID-19, job creation is central to Victoria’s recovery. Targeting 400,000 new jobs by 2025, the Government’s Jobs Plan will increase payroll tax thresholds, provide $250 million in wage subsidies for business to hire 10,000 new employees with $150 million specifically for women impacted by COVID, and implement a new portable entitlements scheme for casual workers.
Mega-projects lead the way
Trademark major projects will continue, along with localised ‘shovel ready’ opportunities, delivering immediate returns and partnership with the private sector:
- $2.2 billion Suburban Rail Loop first stage works between Cheltenham and Box Hill.
- $5 billion for Melbourne Airport Rail Link – matched by the Federal Government.
- $2 billion for Geelong Fast Rail, with new track between Werribee and Laverton to save an average 15 minutes per trip.
- $272.4 million to upgrade the Great Ocean Road and inland roads, key infrastructure to service regional tourism growth.
Social housing landmark
There is $5.3 billion for public, community and affordable housing. Comprising 12,000 new homes and capital upgrades across state housing stock, it is the largest investment in social housing in recent Australian political history.
Post-pandemic health splurge
Some $9 billion has been invested in including:
- $384 million for the Warrnambool Base Hospital redevelopment.
- $10 million to plan the redevelopment of Royal Melbourne Hospital, and new campuses of the Royal Melbourne and Royal Women and Children’s Hospitals in North Melbourne.
- $75 million for planning, early works and land acquisition for the Melton Hospital.
- $492 million for 120 mental health beds across Geelong, Epping, Sunshine and Melbourne.
- $152 million for expanded mental health services to respond to the COVID-19 pandemic.
Education and culture
The Government committed to spend heavily to upgrade educational infrastructure, expand employment pathways, and return the creative economy to its pre-COVID strength including:
- $5.6 billion for school infrastructure, upgrades, and new academic support measures.
- $1 billion for TAFE and apprenticeships, including expanding free TAFE, reskilling short courses, traineeship pathways, and “earn while you learn” opportunities via Victoria’s Big Build.
- $554 million to expand universal kindergarten and expand out of school hours care, which the Government highlights as a major barrier to women entering the workforce.
- $1.4 billion Arts Precinct transformation, including the new NGV Contemporary and shared infrastructure for performance and exhibition organisation.
- $220 million creative sector industry support package.
Innovation and clean energy
Seeking to bolster Victoria’s claim as the Australian home of innovation and technology, the Treasurer committed to support research in priority industries, including clean energy, medical research, agri-food, advanced manufacturing and digital technologies. Acknowledging the impact of global border closures on education exports, new initiatives aim to significantly expand the state’s advanced manufacturing capacity:
- $2 billion Breakthrough Victoria Fund, to invest in research and support adoption and commercialisation, as well as $210 million for medical research.
- $682 million to develop Clean Energy Zones that increase system reliable, and plan for 600 megawatts of new supply via a second renewable energy target auction.
- Construction of 100 new Next Generation Trams, supporting 1,800 Victorian jobs and investing in the manufacturing supply chain.
- $448 million for energy efficient home upgrades, including social and affordable housing, and $191 million addition funding for the Solar Homes program.
- $332 million to fund the Victorian Circular Economy policy, announced late-2019.
The regional recovery
Encouraging Victorians to explore their state over the summer holidays, the Treasurer announced a raft of measures to drive a recovery across regional economies and encourage businesses to make regional Victoria its base, including:
- $465 million Tourism Recovery Package, including voucher systems for Victorians to explore the state regional and rural destinations.
- $682 million Digital Future Now funding to expand reception and wireless coverage across regional and rural communities.
- $165 million addition to the existing Regional Jobs and Infrastructure Fund, funding targeted local program with demonstrated employment or productivity benefits.
- 50 per cent stamp duty concession and 50 per cent land transfer duty concession for regional commercial and industrial purchases.
- $115 million to position the agriculture sector for future growth and opportunities.