Coalition target debt, tax in state budget reply

The Liberals and Nationals have outlined their pitch to Victorians ahead of the state election, with opposition leader Jess Wilson saying “respect for taxpayers” was at the heart of the coalition’s strategy.

Wilson officially responded to Labor’s 2026–27 budget on Tuesday this week.

Under the coalition’s 10-year economic plan, Victoria will achieve a cash surplus within six years.

Speaking in Parliament, Wilson described it as “a plan to restore confidence, reduce debt and build a stronger economy”.

If they form government, the coalition will prioritise frontline workers and freeze the hiring of back-office roles.

An extra 3,000 police will be recruited and more than 40 police stations closed or operating under reduced hours will be reopened.

Wilson said it was “time for an honest and frank conversation” about the size of Victoria’s public service.

There are several tax measures, including improving household affordability by progressively increasing the land tax threshold to $300,000, increasing the payroll tax threshold to $1.2 million by 2028–29, and reducing the metropolitan payroll tax rate to 4.8 per cent from 2030–31.

“This tax reform will make it cheaper for businesses to create jobs. It will increase economic growth, which will make debt reduction easier,” Wilson said.

On governance, the coaltion will establish a charter of budget honesty and real-time expenditure tracker, a royal commission into the Big Build and a new construction sector watchdog.

“At the heart of the Liberal and Nationals strategy is respect for taxpayers, because when governments lose respect for money, they lose respect for the people who earn it,” Wilson said.

The new policies will be funded by scrapping Treaty – estimated to save $1 billion – removing the Emergency Services and Volunteer Fund, repealing taxes on schools, visits to the GP and short-stay accommodation, and lifting the stamp duty free-threshold to $1 million for first home buyers.

The coalition has also previously announced it intends to pause and review the Suburban Rail Loop, which has an estimated first stage cost of $34.5 billion, if it forms government.

Wilson said a coalition government would be honest about what was achievable.

“We will not sugar-coat the state’s financial position, because Victorians deserve honesty,” she said.