Victorian Budget 2018, a spotlight on some new initiatives

Victorian Budget 2018, a spotlight on some new initiatives
Victorian Budget 2018, a spotlight on some new initiatives


Victorian Treasurer, Tim Pallas, has handed down the Andrews Government's fourth and final budget prior to the state election to be held in November.

You can't help but feel that this budget is one geared for the coming election, but also it's pretty clear the state government is grasping the population growth challenge with significant investment in skills in job areas that the Treasurer himself has said are in short supply.

Many of the initiatives contained within the budget papers were announced prior to today, including transport planning initiatives such as the south-east light rail line planning work, marrying together higher-speed rail services to Geelong with Melbourne Airport's rail link study and suburban road upgrades.

Instead, the surprises left to the Treasurer to unveil include a skills boost with a policy to make TAFE courses in 30 different disciplines the state needs to be free, a large amount of money allocated to mental health and a payroll tax incentive for businesses based outside Melbourne.

Other analysts are framing the budget as one where the battle for the next state election will be in the 'burbs however the payroll tax cut for regional businesses appears to throw the gauntlet down at the feet of the opposition who have been pursuing a decentralisation policy for Victoria.

It might not be the silver bullet for increasing the movement of population and employment growth away from Melbourne but building on last year's tax cut adds another dimension to the decentralisation debate, with a decent amount of policy, now unveiled, to back it up.

In last year's budget, Spring Street unveiled an enormous regional railway package - to the tune of $1.5 billion - which was focused on improving capacity on regional rail lines. 

The big three regional cities on the western flank of the state have enjoyed "freewayification" of their primary connections to Melbourne, in some case for multiple decades, and the current government is now focused on the public transport connections.

It makes sense we start to see where the economic incentives are headed for regional growth and the payroll tax cut.  The payroll tax rate for regional areas (2.425%) from July 1 will be 50% of the metro business rate (4.85%).

Another interesting initiative which fits with the high population growth and 'big build', as the state government calls it, that's currently underway is a huge rollout of funding to train people for in-demand skills. 

The state will monitor skills needs and periodically update the list of courses that will be free.  The Premier tweeted the TAFE courses that will be free of charge from next year:

If it ever became 'cool' again to borrow big to build nice things, Victoria's in a very good position. 

As it stands, the budget documents show that net debt in the state will rise to 6% of Gross State Product by the 2021/2022 financial year (up from 5.4% this year) and the Victorian Treasury is estimating the state will become a half trillion dollar economy by 2021/2022 with a GSP of $523.3 billion and $31.4 billion in net debt.

Victorian Budget 2018, a spotlight on some new initiatives
Projected net debt to GSP

 See all the budget documents on

Alastair Taylor

Alastair Taylor

Alastair Taylor is a co-founder of Now a freelance writer, Alastair focuses on the intersection of public transport, public policy and related impacts on medium and high-density development.


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