- The budget includes more than $12 billion for the health system.
- Forecast deficit of $7.9 billion in 2022-23, returning to surplus in 2025-26.
- Net debt projected to rise to $118.5 billion in 2022-23 and continue rising.
The 2022-23 Victorian Budget delivered on 3 May invests more than $12 billion in the state’s health system to ease pandemic pressure points.
Other budget focus areas include funding to host the Commonwealth Games in regional Victoria in 2026 and major investment in regional initiatives, transport infrastructure and education.
Members can expect to receive calls from clients about applying for the new $250 Power Saving Bonus and the Victorian Sick Pay Guarantee for casual and contract workers.
Unlike last year’s budget, no significant tax changes have been made. There will be a change to the tax rates of poker machines at Crown Casino which will now be subject to the same tax rates as not-for-profit, community-based venues, such as RSLs. This is expected to raise $30 million annually.
The budget forecasts that the economy will grow by 3.25% and employment will grow by 1.75% in 2022-23. Unemployment is predicted to remain at a record low average of 4% through 2022-23, before steadily rising.
General government sector revenue is expected to grow from $84.5 billion in 2022-23 to $91.4 billion in 2025-26. Expenditure is expected to fall from $99.5 billion in 2021-22 to $89.8 billion in 2022-23, as temporary support for the public health response and economic recovery ends.
Infrastructure spending will average $21.3 billion annually over the forward estimates.
A fiscal deficit of $7.9 billion is forecast for 2022-23, with a return to surplus of $0.7 billion predicted for 2025-26.
Net debt is expected to be $101.9 billion at June 2022, rising to $118.5 billion in 2022-23, and continuing to rise over the forward estimates before reaching $167.5 billion by June 2026.
Key budget announcements
Outlined below are the key budget announcements and an infographic, available in My CA, to help members guide their clients and businesses.
1. Pandemic Repair Plan
At the heart of Victoria’s election year budget is a Pandemic Repair Plan that will invest $12 billion in the health system over four years.
Highlights include $4.2 billion to support the ongoing pandemic response, $2.9 billion in health infrastructure including a new hospital in Melton and upgrades to existing hospitals, $2.4 billion for more emergency staff and new wards, and $1.5 billion to provide 40,000 extra surgeries over the next year. Up to 7,000 new healthcare workers, including 5,000 nurses, will also be trained and hired.
2. Victorian Future Fund
The Victorian Future Fund will be established by the Government to manage the fiscal impact of COVID-19 and reduce the debt burden on future generations. The Fund will support the state’s debt stabilisation strategy and will initially be established using proceeds from the VicRoads Modernisation Joint Venture.
Investment returns from the Fund will be quarantined and returned to the Fund so that its balance will grow over time to offset borrowings, with both the initial investment and future returns used to repay COVID-19 borrowings. The Fund is projected to have a balance of around $10 billion in the medium term.
3. Regional initiatives
Regions across Victoria will receive $5.7 billion for hospital upgrades, more schools and better roads.
The more than $1 billion for regional health infrastructure will provide access to first-class health services and modern treatments closer to home, as well as funding to train and recruit thousands of nurses, doctors, ambulance workers and allied health professionals.
Agriculture and regional development receive $193.4 million to support farmers, jobs and regional economies.
The budget invests $3.5 billion in transport infrastructure. Highlights include $780 million in 2022-23 for road maintenance works across the metropolitan and regional road network, $338 million for train service upgrades, $265 million to build and upgrade trains and trams including 12 new VLocity trains for the regions, and $248 million for V/Line improvements to support regional rail operations and freight rail corridor maintenance works.
However, the state capital works program, which includes key transport infrastructure, shows a $5.8 billion net increase in project costs, and a 20% variance on completion timeframes, measured since the 2021-22 budget.
5. Commonwealth Games
The budget allocates $2.6 billion over the next four years for sporting and transport infrastructure to support the delivery of the 2026 Commonwealth Games in regional Victoria.
The budget allocates $1.8 billion for building 13 new schools and upgrading 65 existing schools, additional stages at four schools and expanding capacity at two schools. A further $779 million will recruit 1,900 new teachers.
Unprecedented investments in early education include more than $217 million to ensure every family has access to an early learning service closer to home, and also provides funded universal access to kindergarten.
7. Social and affordable housing
The Government intends to work with the community housing sector to provide a further $1 billion in low interest loans and government guarantees to community housing agencies to deliver social and affordable housing. This is expected to create up to 6,000 new social and affordable homes.
8. Power Saving Bonus
The budget will invest $250 million to enable all Victorian households to apply for the new $250 Power Saving Bonus from 1 July 2022. The $250 payment is open to all Victorian households that use the Government’s Victorian Energy Compare website to search for a better electricity deal. Households that have previously claimed a $50 or $250 Power Saving Bonus are still eligible for this one-off payment to ease cost of living pressures.
9. Sick Pay Guarantee
The budget provides $246 million for the Sick Pay Guarantee pilot. More than 150,000 Victorians with insecure work in eligible occupations that don’t provide sick or carer’s pay, will be able to participate in the pilot project. The guarantee will provide up to five days’ sick or carer’s pay per annum at the national minimum wage.
10. Victorian Industry Fund
The $120 million Victorian Industry Fund will support sovereign capability, advanced manufacturing, business investment, supply chains, small business and employment.
Fund highlights include $40 million in grants to support growing businesses, $40 million to attract international business investment into Victoria, $20 million for an equity investment pilot fund to attract companies that align with Victoria’s strengths such as medical technology, and a $7 million Low-Carbon Manufacturing Grant Program that will help Victorian manufacturers to compete globally for renewable energy components.
2022-23 Victorian Budget Papers
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Victorian Energy Compare
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Victorian Sick Pay Guarantee
Find out more about the Victorian Sick Pay GuaranteeRead more
Secure Work Pilot Scheme
Find out more information on the Secure Work Pilot SchemeRead more
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