Budget Summary

The pandemic has been the main driver of new funding in the 2020-21 Victorian State Budget. Victoria has invested $13 billion to support families, workers, and businesses deal with the crisis and avoid the worst impact of the pandemic-induced economic downturn. Professional workers will play a critical role in this recovery. 

With significant pre-budget job and infrastructure announcements, the Government’s infrastructure investment over the next four years is set to average $19.6 billion per year, the largest capital investment in the state’s history, and compares strongly against the $4.9 billion average per year between 2005-06 to 2014-15. 

Complex long-term infrastructure projects have received planning, design, and business case support, in addition to significant ongoing projects such as Airport Rail and the Level Crossing Removal Program. The Government also outlined the largest investment in social and affordable housing in the state’s history.

The $2 billion Breakthrough Victoria Fund (over 10 years) with a focus on medical research, health and life sciences, advanced manufacturing and digital technologies and support for 15,700 jobs over the next ten years, is welcome news for our members.    

The significant IT and digital upgrades being pursued in this budget reflect the changed working environment for many people, but also the opportunities to be gained through IT and digital infrastructure and transformation.  

Importantly for our engineer members, the Budget allocated $4.9 million to support the rollout of the Victorian Engineer Registration scheme, a scheme that PA members have been advocating for many years. With the Victorian registration scheme starting in just over 6 months, engineers are encouraged to start preparing for the scheme and contact us about our RPEng program. 

An investment of $5 million over two years for the Victorian Government’s Secure Work Pilot Scheme will be an important first step to tackle insecure employment. The pilot will provide 5 days sick and carers’ pay for eligible workers in priority industries. This pilot scheme has the potential to make a huge difference for casual employees, including our interpreter and pharmacy members.
Economic growth of more than 3% per annum for the three years to 2018-19 has come to an end. It is expected that the economy has contracted by 0.25% in 2019-20 and is forecast to contract 4% in 2020-21. However, a sharp improvement of 7.75 % is predicted in 2021-22, off the back of significant government economic stimulus, which will level out to 3.25% and 3% in the following two years. 

Given the loss of 180,000 jobs between the March and September quarters 2020, the unemployment rate is expected to peak at 8.25 per cent in the December quarter 2020, and average 7.75 per cent in 2020‑21. The Victorian Government has set out an ambitious plan to create 200,000 jobs by 2022, and 400,000 by 2025, with the unemployment rate expected to return to 5.75% by 2023-24. 

Whilst net debt, and debt to gross state product (GSP) rise over the forward estimates, it is during a period of low interest rates and the Government has outlined a four point strategy to stabilise debt levels, starting with creating jobs, reducing unemployment and restoring economic growth. This is a sensible approach which will help avoid the worst impact of the pandemic induced economic downturn and will minimise unemployment and give the economy the best chance of recovery. It is based on the approach successfully adopted by federal and state governments during the Global Financial Crisis, which enabled a return to economic growth at that time. 
If you would like to read the budget papers directly you can find them here.

The $619 million Jobs for Victoria initiative is expected to assist hundreds of thousands of Victorians looking for work and includes $250 million to support businesses to hire at least 10,000 Victorians through a six‑month wage subsidy. At least $150 million of subsidy support will go towards getting women back in work, with around a third of these placements being provided to women over 45, recognising the additional barriers to employment they face. 

The Victorian Government’s role in Higher Education is primarily through the TAFE sector and there is a significant expansion of the Free TAFE program, with an extra $1 billion invested in the training system including:

  • $630 million for 80,000 new Free TAFE and subsidised training places and $155 million dedicated to new opportunities for young people, women and those affected by economic disruption
  • $57 million for accredited short courses and a workforce skill set pilot focused on the unemployed
  • $19 million to introduce innovative new models to support apprentices and trainees
  • $100 million to build Chisholm Institute’s Frankston Campus Redevelopment Stage 2 and Melbourne Polytechnic’s Collingwood Campus Redevelopment
  • $58 million to support Victorian workers to earn while they learn including $33 million to expand opportunities for apprentices and trainees through a flagship Big Build training pathway to see up to 1,500 apprentices and trainees employed across the Big Build each year
Public Transport

  • Suburban Rail Loop, $2.2 billion for early works on Stage One between Cheltenham and Box Hill including preparation for tunneling and launch sites and geotechnical investigation. Initially supporting up to 800 jobs and 20,000 projected during construction
  • Geelong Fast Rail, $2 billion with matching Commonwealth contribution for business case and design preparation as part of the First Stage of work with 2,800 jobs projected during construction
  • Regional Rail Upgrades, $3.8 billion in maintenance and support services including track upgrades between South Geelong and Waurn Ponds stations and a business case for the South Geelong Tunnel ($899 million), Stage 3 of the Shepparton Rail Line Upgrade ($400 million), complete Stage 2 of the Warrnambool Rail Line Upgrade ($260 million)
  • 20 million to trial the viability of a zero-emission bus fleet

  • $450 million for a statewide road maintenance blitz including $35 million to strengthen bridges and replace older intelligent transport systems 
  • $17 million upgrade to freight routes for farmers and processors in Victoria’s vital south‑west dairy supply chain
  • $255 million to enable a five‑year program of upgrades to the Great Ocean Road
  • $241 million to complete Stage 3 of Princes Highway East duplication between Traralgon and Sale
  • $117 million to fund metropolitan road and intersection upgrades 

    Social and affordable housing

  • $5.3 billion Big Housing Build will construct more than 12,000 homes across metropolitan and regional areas for social housing including more than 9000 new homes will be built, including replacing 1100 old public housing units 
  • A $2 billion Breakthrough Victoria Fund (over 10 years) will provide cash to local businesses for research and development, adoption and commercialisation. 

    • A $50 million fund to provide low-interest loans for companies eligible for the federal government’s research and development tax incentive, providing for up to 80 per cent of their forecast refundable tax offset.
    • $388 million for the Keeping Victorians Moving initiative to deliver technology upgrades and additional resources to reduce congestion and improve travel times on the metropolitan road network as well as funding to reduce the wait time for registration and licensing services
    • $626 million for Digital Future Now package focused on regional transition to a digital economy
    • $350 million Victorian Higher Education State Investment Fund to support universities with capital works, applied research and research partnerships focused
    • Supporting medical research to protect Victorians and grow jobs for the future through the Australian Institute for Infectious Disease, (subject to completion of the business case and co-investment from the Commonwealth)
    • Establishment of a National Centre for Inflammation, led by the Hudson Institute
    • Support for the Melbourne Genomics Health Alliance

    The budget delivers the largest clean energy investment of any state at $1.6 billion to create renewable energy hubs across the state, improve crucial grid infrastructure, including:

    • $682 million to establish six Renewable Energy Zones including more than 600 megawatts of new, clean energy through the Victorian Government’s second renewable energy auction. This follows the lead in NSW where REZs are being established to help plan for the future energy transition and planning for transmission needs of the state. The REZs will be based on a plan developed by AEMO which identified solar and wind projects in the north and central west of the state, hydro in the alps and wind generation in Gippsland and central Victoria.
    • $448 million for energy efficiency upgrades for homes, including 250,000 low income households and 35,000 social housing properties.
    • $191 million Solar Homes Program expansion, with an estimated 42,000 solar panel rebates to be provided over the next two years

    The big ticket item in manufacturing is the order of 100 new trams to be manufactured in Victoria, however there are a number of funds setting out to grow Victoria’s manufacturing base, which is a positive sign the Government has learnt from the pandemic experience the importance of supporting this critical sector.

    • $1.5 billion to manufacture 100 new accessible trams in Victoria supporting 1,800 jobs
    • $60 million for the Manufacturing and Industry Development Fund (MIDF) which will focus on manufacturing and industry development in key sector growth areas. The MIDF will support essential and sovereign manufacturing and industry capability in Victoria
    • $20 million to establish the Australian MedTech Manufacturing Centre (AMMC) to boost jobs, innovation and investment and make better use of the Government’s role as a major MedTech customer. Based in Melbourne, the AMMC will gather and communicate information about MedTech opportunities and support local businesses to collaborate and pursue MedTech opportunities
    • $6 million towards the Victorian Defence Industry to secure roles in delivering major defence contracts through advocacy, advisory and capability development activities

    The Breakthrough Victoria Fund is a ten year, $2 billion dollar investment fund focusing on priority industries, including medical research, health and life-sciences, agri-food, advanced manufacturing, clean energy and digital technologies and the most significant announcement in this space, supporting 15,700 jobs over the next 10 years.

    Further, the Budget sets out a $626 million Victoria’s Digital Future Now fund to improve mobile coverage and broadband access in suburban and regional areas including:

    • $250 million to co-fund businessgrade broadband connectivity for Victorian suburbs and regional towns through the Gigabit State program to be delivered in partnership with the Commonwealth
    • $300 million to eradicate mobile blackspots in populated areas of regional Victoria subject to a cocontribution from the Commonwealth
    • A further $156.1 million over four years to drive the digital transformation across government through Digital Victoria
    • $64 million will deliver the Digital Skills and Jobs Program, enabling unemployed Victorians to undertake digital skills training or a digital internship assisting 5,000 unemployed workers to retrain and reskill, with a strong focus on supporting women
    • $20 million investment to staff the State Control Centre 24 hours a day, 365 days a year

    Significant investments have been made in mental health and health, with $869 million in mental health initiatives, including more acute mental health beds, and the roll out of initiatives associated with the Royal Commission into mental health. 

    New health initiatives include:

    • $2 billion to build new hospitals and upgrading existing ones, including:

                            ○$384 million to commence the first stage of the Warrnambool Base Hospital

                            ○$75 million to purchase land, detailed planning and early works for a new Melton hospital

                            ○$66 million to acquire land in Cranbourne, Pakenham, Torquay, City of Whittlesea, Eltham, Point Cook and the inner south to continue planning for new community hospitals

    • $136 million for upgrades for Ambulance services including $10.4 million that will also ensure year-round ambulance services for Nagambie, and a 24-hour service for Diamond Creek
    • $200 million to establish a new Metropolitan Health Infrastructure Fund to fund upgrade and improve city and suburban health services, and $120 million for the Regional Health Infrastructure Fund
    • $85 million for engineering upgrades and to replace hospital medical equipment statewide
    • $30 million to refresh clinical technology including pathology, diagnostic imaging and patient management systems
    • $40 million to improve energy efficiency in our State’s public hospitals, with solar power and highefficiency LED lighting
    • $13 million to boost virtual care technology, making it easier for busy families and patients in regional and rural communities to access support and includes investing in new software to facilitate telehealth appointments, a trial of telehealth with Ambulance Victoria and the purchase of devices to make home-based care safer for patients and clinicians
    • $21.6 million for Victoria’s innovative Mobile Stroke Unit and the Victorian Stroke Telemedicine

    Over the course of the pandemic practical support for small businesses has included:

    • $836 million in New Job Tax Credits for small and medium businesses who rehire staff, restore hours and create new jobs
    • An increase in the threshold for paying payroll tax on an annual basis from $40,000 to $100,000, reducing administration costs and providing cash flow support
    • Small businesses will also be eligible for Solar Homes, with up to 15,000 rebates available to help reduce energy costs
    • $2 billion in tax deferrals, including allowing businesses with payrolls of up to $10 million to defer their 2020-21 payroll tax liabilities for up to 12 months
    • More than $1.8 billion in relief from taxes and fees, including a full refund and waiver of 2019-20 payroll tax for small and medium businesses
    • $100 million Sole Trader Support Fund to help sole traders in affected sectors
    • 2020-21 Fire Services Property Levy was frozen at the 2019-20 revenue target
    • Increases to the landfill levy have also been deferred

    $6.3 million to support, train and employ women building surveyors within local councils is an important feature of the Budget alongside the big ticket gender equality focused initiatives of $774 million invested in early childhood education, including free kindergarten programs in 2021 and the continued roll-out of funded 3-year‑old kinder allowing more parents to enter the workforce, with additional focus around the historic Gender Equality Act 2020.

    • $13 million establish the Office of the Gender Equality Commissioner, ensuring effective administration and implementation of the Gender Equality Act 2020 and to develop and maintain a reporting platform for in scope entities to facilitate defined entities’ submission of Gender Equality Action Plans and progress reports
    • $38 million to continue the Government’s Respectful Relationships program in Victorian schools promoting respectful behaviour, and healthy relationships
    • The Gender Equality budget information paper sets out activity across all sectors