Victoria has pinned its hopes of economic recovery on housing, infrastructure and skills as the state tries to reboot its economy after two COVID lockdowns.
But the government has come under attack for failing to release a budget paper which would uncover any impacts from delays or budget overruns on major capital works projects.
Releasing the state budget, Treasurer Tim Pallas says Victoria’s fiscal deficit will surge from $6.5 billion in 2019/20 to $23.3 billion in 2020/21 and will not return to balance at any stage during the four-year budget estimates period.
Net debt, meanwhile, will rise from $44.3 billion in 2019/20 to $86.7 billion in 2020/21 before reaching $154.8 billion in 2023/24.
But there was good news for the state’s construction industry on housing, infrastructure and training.
To stimulate the housing sector, the government will waive up to 50 per cent of stamp duty on newly built or off-the-plan homes valued at up to $1 million until June 30 next year.
Existing homes will be eligible for a 25 per cent waiver.
As well, a $500 million Victorian Homebuyer Fund will be launched to help people who do not have a 20 per cent deposit buy homes. The fund will contribute to the purchase price in exchange for equity in the property.
To boost housing supply further, a 50 per cent land tax discount to be introduced from 2022 on new build to rent developments.
On infrastructure, the state plans to spend $78.4 billion over the next four years.
Major funding commitments include:
- $6 billion over four years for Victoria’s Big Housing Build, including plans to build up to 12,000 social and affordable homes
- $2.2 billion for commencement of works on the first stage of the Suburban Rail Link between Cheltenham and Box Hill
- $2 billion for the Geelong Fast Rail project
- $1.9 billion to upgrade 162 schools, building one new school and add four additional stages at recently built schools
- $1.6 billion for new heating and cooling systems in 250,000 low income homes and 35,000 social homes.
- $2 billion for new and upgraded hospitals and community assets
- $660 million to deliver the next stages of the Shepparton and Warrnambool Line Upgrades
- Continued work on upgrades to Barwon Heads Road, Narre Warren North Road and South Road as well as continuing planning on the Bulla Bypass
- $48.4 million to commence to deliver Victoria’s share of funding to commence work on the Murray Basin Rail Project
- $276.5 million for the final stages on the Dandenong Corridor rail project
- Ongoing work associated with the Metro Tunnel, removal of 75 level crossings and the North East Link.
On training, the government will fund up to 80,000 new subsidised Free TAFE places and will create 50,000 places in skills focused short courses along with expanding pathways for apprenticeships and traineeships.
Building industry lobby groups applauded the budget.
“Overall, we are pleased with the state budget handed down by the Treasurer,” Master Builders Association of Victoria chief executive officer Rebecca Casson said.
“The Government has consulted with our industry as to how we can help the economy and our members voices have been heard.
“We know there is a long road ahead for the recovery of our industry and the entire economy. This promises to be a positive start as we look to build a better future.”
Bill Krotis, Victorian Chapter President of the Australian Institute of Architects, agrees.
“The 2020 Victorian Budget makes historic investments in our State’s future and leverages this spending to deliver outcomes that create more than just economic stimulus and jobs, but a stronger, more sustainable future for the state, especially in the built environment,” he said.
But the government has come under fire for its failure to release Budget Paper 4, which means that there was no update on progress, delays or budget adjustments for the state’s multi-billion capital works program.
Opposition transport infrastructure spokesman David Davis said this has led to a lack of accountability with regard to potential cost blowouts on existing projects.
Treasurer Tim Pallas said the information had not been produced this year on account of the disruption which COVID had caused both to projects and to the preparation of the budget.
He says the government is reviewing each of these projects and any updates will be provided with the next budget in May next year.