Victorian budget belt tightens but less squeeze on families

FAMILIES and vulnerable people feeling the pinch of cost of living have been offered a small boost in a stripped-back state budget reeling from soaring debt.

In her Victorian budget debut today (Tuesday, May 20) titled “Focused on What Matters Most”, Treasurer Jaclyn Symes dug into the state coffers for a $2.3 billion cost-of-living package.

Another round of the power saving bonus will be rolled out in August at a cost of $50 million but it is limited to a $100 discount for concession card holders.

An extra 27,000 rebates will be handed out for home owners to install electric heat pumps and solar hot water and solar hot water systems and $18 million set aside for pharmacists to treat more Victorians without a trip to the doctor.

Premier Jacinta Allan has called getting millennials into homes the fight of her life but there wasn’t fresh housing help beyond $61 million to reduce stamp duty for off-the-plan apartments, units and townhouses for another 12 months.

Ms Symes described the budget as “responsible”, delivering on the government’s fiscal plan and providing real help with cost of living.

“This is support you can feel – at the kitchen table, at the school gate, at the train station.”

Net debt projections came in at $194 billion by mid-2029, with interest payments to service it rising to $29 million a day by that point.

Victoria’s debt as a share of the economy is expected to peak at 25.2 per cent in 2026/27 before falling ever so slightly.

Ms Symes will travel to the US in coming weeks to meet with credit rating agencies after they called for the state to demonstrate “fiscal discipline”.

The state was gifted an extra $3.7 billion in GST revenue from the Commonwealth Grants Commission for 2025-26, $1.5 billion higher than forecast.

Ms Symes said the government decided to deliver a smaller forecast operating surplus next financial year to fund more cost-of-living measures and service delivery, including a record $31 billion for health.

The budget does not contain an exact number of job losses stemming from a review, led by Helen Silver, of the Victorian public service.

But it banks on $3.3 billion in savings from ceasing and redesigning programs, reducing duplication and cutting about 1,200 full-time equivalent positions.

“Redundancies will be to come but they’ll not be as high as the ultimate number,” Ms Symes said.

More savings will follow after Ms Silver’s final report is handed to the government in June.

“What I found pretty compelling in Helen’s initial work was Victoria have over 500 entities and 3400 public boards and committees,” Ms Symes said.

“You can’t tell me there’s not some fat in there.”

Infrastructure spending is forecast to slide over the next four years but the total for new and existing projects has jumped $8.1 billion higher to $213 billion.

Ms Symes stuck to her word of no new or increased taxes, although the Emergency Services Volunteer Fund levy that has rankled firefighters and farmers will add $1.8 billion a year to the budget bottom line by 2026/27.

Key forecasts in the 2025-26 Victorian budget:

• Net operating result: $600b surplus in 2025-26 to $1.5b surplus in 2028-29
• Net cash result: $15.5b deficit in 2025-26 to $11.4 deficit in 2028-29
• Tax revenue: $39.2b in 2025-26 to $47.9b in 2028-29
• Employee expenses: $38b in 2025-26 to $42.3b in 2028-29
• Infrastructure spending: $23.8b in 2025-26 to $15.6b in 2028-29
• Net debt: $155.5b in 2025-26 to $194b in 2028-29
• Interest repayments on debt: $6.8b in 2025-26 to $10.6b in 2028-29

 – WITH AAP