Our experts explore the key takeaways from the 2025/26 Victorian State Budget and answer what’s on the table for businesses, industries and communities across Victoria- uncovering opportunities of resilience and growth for your financial landscape.

Relevant observations of the Victorian Budget 2025-26 include the following:

• While the Budget focuses on providing cost of living relief to Victorians, it does little to tackle the State’s debt which is forecast to reach a record $194 billion within four years. Notably, the Budget’s operating surplus of $600 million is $1 billion less than was forecast in December. While Victoria will spend $6.5 billion in new initiatives in 2025-26 only half of that will be offset through savings. This will result in a net increase of $3.1 billion in new spending compared to last year’s budget. 
• While no new taxes have been introduced in the Budget, taxation revenue is forecast to be $41.7 billion in 2025-26 and grow by an average of 4.7% per year over the forward estimates. 
• Despite the ongoing fierce debate around the fire services levy and emergency services and volunteers fund levy (ESVFL) (which will come into effect from 1 July 2025), the Budget forecasts that the ESVFL will generate $1.6 billion in 2025-26. This indicates that it is unlikely that the Government will remove or amend the ESVFL, which would create a substantial shortfall in the Victorian Government’s revenue that would cause its thin operating surplus to go into deficit.

What does the State Budget mean for you?

Our Fast Facts provide an overview of the budget insights and highlight potential opportunities for you.

Take a look at what the Victorian State Budget mean for you in 2025 below:

Contributors

William Zhang

Eric Lay

The post VIC State Budget 2025/26 appeared first on SW Accountants & Advisors.

Key takeaways

• Although there are no key tax measures introduced, direct property taxes will continue to be the source of over 50% of new revenue for the Victorian Government due to increased transaction volume and rising land values (although this is expected to be tampered by forecasted interest rate rises).
• A new Victorian Future Fund will be established to manage the fiscal impact of COVID 19. It will initially be funded from the VicRoads Modernisation joint venture and is expected to have a balance of around $10bn. Investment returns from the Fund is to be quarantined and returned to the Fund to help offset the current debt and return the Budget to surplus by 2025-2026.
• There is a clear focus in this Budget to repair the health system. Included in the Budget is more than $12bn of health-related expenditure including the training and hiring of additional healthcare workers and paramedic staff, funding for Ambulance Victoria to meet growing demand for services and investment to cut surgery waiting lists.
• The two-year Sick Pay Guarantee pilot program will receive $246m in funding to assist provision of a payment of up to five days of sick or carer’s pay at the national minimum wage for insecure work (casual employees).
• $250m provided for a one off $250 Power Saving Bonus to all Victorian households using the Victorian Energy Compare website to locate the cheapest electricity deal. The scheme will run from 1 July 2022 to 30 June 2023.
• A commitment of $111m to support Victoria’s tourism and major events.
• The Victorian Government has allocated $1.8bn to the school building project and plans to continue upgrading schools until it achieves its intended target of 100 new schooling facilities by 2026. The program includes upgrades to 65 schools including 36 special schools, building 13 new schools, additional stages at four more schools, and expanding capacity at two schools to meet enrolment demand.
• The Victorian Government also plans to invest $5bn in early three-year-old childhood education by increasing universal educational access for disadvantaged families as well as providing support to individuals from diverse backgrounds and $131m to assist students from rural areas to access four-year-old early childhood services.

For full overview of the infrastructure measures see our breakdown here.

Victorian Industry Fund to support Victorian Businesses

The Government has introduced a $120m fund to support the advancement of domestic manufacturing and other high priority sectors. Some of the initiatives to be supported by this Fund include:

• $40m to provide grants to support rapidly growing businesses
• $40m of targeted financial incentives to attract investment into Victorian businesses
• $20m for an equity investment pilot fund to attract highly innovative companies particularly in areas such as medical technology
• $7m low-carbon manufacturing grant program to help Victorian manufacturers to compete globally in the renewable energy space
• $4.5m for 300 digital jobs for manufacturing internships to help train Victorian workers in this industry. 

Significant Tax Measures

No significant new tax measures were announced in the 2022/23 Budget although there were minor amendments in relation to:

• Equalisation of gambling tax rates for electronic gaming machine operators

• Exemption from motor vehicle duty for wheelchair accessible commercial passenger vehicles that provide unbooked services.

However, as noted above, the State Taxes are to be a major source of revenue for the Victorian Government. The table below shows the annual revenue expected from State Taxes over the next 4 years.

Opportunities

The opportunity for businesses may come from the expected economic growth although this is not anticipated to be significant. Business sectors such as Medtech, pharmaceuticals and manufacturing should benefit from the increase in funding.

Did the VIC Budget measure up to expectations?

The Budget fell short of providing the required assistance to boost businesses which are facing significant uncertainties.

The Government’s commitment to repairing Victoria’s health system in needed and welcomed. However, the Government has not sought to increase property taxes to decrease the State’s debt and is instead relying on solid economic growth to repair the budget.

Please reach out to one of our experts below for assistance navigating the implications and opportunities this Budget presents for you, your business and your industry.

Contacts

Abi Chellapen

Daren McDonald

Stephen O’Flynn

The post VIC State Budget 2022/23 appeared first on SW Accountants & Advisors.