Funding for more than $20bn core government services on the chopping block ahead of state budget

Almost $22bn in government services including new school builds, mental health and homelessness are facing the axe, with fears of wholesale cuts as part of next week’s state budget.

Funding for almost $22bn of core government initiatives is due to end this year with fears of wholesale cuts to critical services as part of next week’s state budget.

New analysis by Victoria’s independent Parliamentary Budget Office shows $21.3bn in funding for 368 government programs is due to end unless extended by Treasurer Jaclyn Symes on Tuesday.

It has prompted fears critical services, including to family violence and mental health programs, could be cut across key portfolios including education and health.

While some programs will not need to be continued, the government will need to find funds to ensure no disruptions to others due to expire while at the same time finding massive cuts to rein in spending.

It comes as the RSPCA has warned it will be forced to scale back its operations and stop investigating reports of cruelty to horses, poultry and livestock without urgent government funding.

The PBO analysis shows programs due to lapse range from key family violence prevention initiatives and mental health supports to cultural grants and regional development programs.

Almost 30 Department of Health initiatives are at risk including the $32m Supporting our GPs program, and the $19.8m Safer digital healthcare initiative.

Specialist alcohol and other drug services for Aboriginal Victorians is also at risk, while a $2.8m for community mental health and wellbeing programs is also due to lapse.

Multiple family violence programs would also require continued funding, including a $44.1m initiative to respond to children and young people impacted by family violence and sexual assault.

Shadow treasurer, James Newbury, said he feared the government would be forced to make critical cuts to curb a decade of fiscal recklessness.

“When you negligently waste taxpayers money for a decade, as Jacinta Allan and Labor have, you end up being unable to pays the bills,” he said.

“As community services and support organisations face tough times making ends meet, this Labor government’s financial mismanagement will mean that many in need will go without.

“All because Labor is mismanaging money and as a result, hurting Victorians.”

There are fears of wholesale cuts in next week’s state budget. Picture: David Geraghty

The government is working to rein in spending to slow official forecasts which show Victoria’s debt is on track to hit $188bn by 2028.

Government sources have warned major project blowouts and a ballooning wages bill – which has almost doubled from $18.8bn when it came to office – will blow out that figure.

Sources familiar with ongoing budget planning said funding could be slashed to critical local services including specialist legal services.

The government’s latest financial update showed expenses had increased by $3.36bn more than anticipated while inflaming fears about the state’s debt trajectory.

Credit ratings agencies have warned Victoria would face an almost certain downgrade if it couldn’t rein in spending and put a lid on major infrastructure spending.

Such a move would lead to increased borrowing costs and make it harder for the government to start lowering the state’s debt profile.

Treasurer Jaclyn Symes has refused to rule out introducing new taxes as part of her first budget.

Treasurer Jaclyn Symes has refused to rule out new taxes. Picture: David Caird

Outer Melbourne Councils spokesperson, Cardinia Mayor Jack Kowarzick, said the Growing Suburbs Fund was an expiring program under threat despite contributing $440m to “critical local infrastructure” in Melbourne’s “diverse and fast-growing outer suburbs” since its establishment in 2015.

He said the program led to the delivery of dozens of community projects across the municipalities of Bass Coast, Baw Baw, Cardinia, Casey, Golden Plains, Hume, Macedon Ranges, Melton, Mitchell, Moorabool, Mornington Peninsula, Nillumbik, Surf Coast, Whittlesea, Wyndham and Yarra Ranges.

Programs due to lapse include key family violence prevention initiatives. Picture: iStock

The fund was topped up by $5m last year, but no funding has been allocated for future years.

“Meeting the needs of Melbourne’s growing outer suburbs is not a year-to-year proposition,” Mr Kowarzick said.

“$5m, even leveraged with co-investment from councils, doesn’t go far across the great swathe of Melbourne’s outer suburbs.

“The ‘big build’ might steal the spotlight, but building better neighbourhoods helps us where we live.

“Single year extensions and small ‘drip funding’ top-ups don’t provide the certainty our suburbs need.

“We need to see this program retained and extended over the long term.”

Opposition leader Brad Battin said he was bracing for a bad budget for Victorians “full of spin”.

“I will ensure my team will go through each and every line of this budget, and we will hold them to account for every single cut they make across this state because of their poor management,” he said.

Originally published as Funding for more than $20bn core government services on the chopping block ahead of state budget