Victoria mid-year budget update: Debt peak down by $1.4bn, taxes up by $1.7bn
Victorian Treasurer Jaclyn Symes has released the mid-year budget update, showing a slim improvement in state’s record debt pile but revealing taxpayers will stump up an extra $1.7bn over the four-year forecast period.
Victorians are expected to be hit with an extra $1.7bn in tax over the next four years amid new government forecasts that see its tax take hit an annual $47.9n.
It can be revealed just $750m in new savings will be realised following the Allan government’s announcement it will slash 1000 jobs in a broad restructure of the public service.
The figure is a fraction of the $4bn spruiked by treasurer Jaclyn Symes on Thursday as she handed down the government’s response into its review of the public service.
But a budget update published on Friday revealed the bulk of the savings, $3.3bn, were included in May’s budget more than a month before the review’s final report was handed to government.
It means no new savings are expected next year while just $196m in 2026-27, $259m in 2027-28, and $295m in 2028-29 will be realised over the forward estimates.
Opposition Leader Jess Wilson said the update showed that Labor was not “serious” about budget repair.
“These figures confirm Labor’s supposed $4bn of savings are a fraud,” she said.
“Labor is double-counting savings already in the budget to make it appear as if it is taking action, all while ignoring its own waste and reckless spending.
“As Victoria’s alternative premier, my first priority is getting our finances under control so we can ease cost of living pressures and prioritise investment in the frontline community safety, health and housing services Victorians deserve.”
New forecasts have also revised down the state’s net debt trajectory, which is expected to hit $192.6bn by 2028-29, an improvement of $1.4bn on May’s forecast of $194bn by that time.
However, at the same time, Victorians are forecast to be slugged an extra $1.7bn in taxes.
On the back of higher than expected tax take, the government is also foreshadowing $3.7bn in extra expenditure including an extra $500m in infrastructure spending.
However an extra $3.8bn in revenue is also expected to be generated compared to May’s predictions.
The state’s annual interest bill has also ballooned by $80m more than expected, and will hit $10.5bn, or $28.8m a day, by 2029.
As a proportion of gross state product, net debt is projected to remain consistent with May projections of 24.9 per cent by 2029.
The government also continues to forecast operating surpluses in 2026-27 of $1.9bn, $2.4bn in 2027-28 and $1.5bn in 2028-29.
An upbeat Ms Symes said the update was “good news” for Victorians while defending the government’s decision to spend more rather than delivering higher surpluses.
“We can bank more and more and have higher surpluses or we can make sure we’re delivering the services that Victorians rely on,” she said.
“Importantly, we are delivering a surplus. I’m proud of that.
“It shows that we have a strong financial discipline to the way we approach the state budget, but I make no apology for spending some of that money on school uniforms, dentistry, free public transport for kids.
“This is all about supporting Victorian families while also having a strong financial position.”
For well over a year Victoria has been a target of global ratings agencies who have repeatedly warned a failure to curb spending would lead to a record low credit downgrade.
But Ms Symes brushed off concerns about such a scenario, which would lead to higher interest costs and constrain the state’s borrowing capacity.
Originally published as Victoria mid-year budget update: Debt peak down by $1.4bn, taxes up by $1.7bn
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