Victorian Budget offers surplus and fulfils election promises

Billions have been pledged to build a new train line, finish the North East link and remove 25 more level crossings in the Victorian Budget.

More than $2 billion is being funnelled into upgrades for Melbourne’s Sunbury rail line to cope with the Metro Tunnel amid booming population growth in the city’s west.

It’s part of a $27.4 billion suburban transport spend outlined in today’s Victorian Budget, with almost all the projects having been promised before the Labor government was re-elected in November.

Regional public transport will receive $615 million, including for 18 new modified V/Line VLocity trains to run on an upgraded northeast line.

Suburban rail gets a $3.4 billion boost, with $2.1 billion for the Sunbury line, including bigger trains to fit in an extra 113,000 peak-hour passengers. The upgrade is expected to be finished by 2023.

The Cranbourne line will also be duplicated at a cost of $750 million, while nearly $550 million will go towards upgrading and duplicating the Hurstbridge line, as promised during the election.

Treasurer Tim Pallas’s fifth budget also includes $15.8 billion to fully fund the North East Link road, which the government says will cut travel times by up to 35 minutes, and $6.6 billion to rip up another 25 level crossings.

Nearly $50 million will be put into new train stations in and around Bendigo, at Goornong, Raywood and Huntly.

Meanwhile, Melbourne’s tram network gets an extra $163 million, buses $50 million and local roads $608 million.

The Budget has maintained a surplus, albeit contracted due to the property downturn, and delivered on the state Labor government’s election promises.

There’s a $1 billion surplus for 2019-20 followed by a cumulative $10.3 billion in surpluses through to 2022-23.

In a budget dubbed “Delivering for all Victorians”, Premier Daniel Andrews’ government has delivered few new announcements in a fiscal plan dedicated to turning election promises into reality.

“In this year’s budget we’re delivering on our positive plan we took to the election,” Treasurer Tim Pallas told reporters today.

Headline health promises — two new hospitals in Footscray and Frankston — are also funded.

Mr Pallas delayed the Budget by a month because of the federal election and told reporters today there was a $2.6 billion difference in his plans because of the Coalition’s win in Canberra.

This was attributed mainly to federal Labor’s promised $2 billion for the Metro Tunnel, which now isn’t on the table.

There is money for a new train line in the Victorian Budget. Picture: Nathan Dyer

Total taxation revenue is forecast to grow by $24.3 billion in 2019-20, but there has been a $5.2 billion hole blown across the forward estimates because a larger-than-predicted property downturn.

The Budget papers reveal there was a 13.6 per cent drop in land transfer duties in 2018-19 and the fall will continue in the coming financial year.

Mr Pallas said the property market was showing signs of recovery.

But he would not plan on a worst-case scenario because “I’m not leading the market or the economy down” and he expected the government’s investment in infrastructure “will have profound” impacts on market sentiment.

Victoria is increasing its debt from $39 billion in 2019-20 to $54.9 billion in 2022-23 or 10 per cent of gross state product.

Debt is predicted to rise to 12 per cent of gross state product (GSP) in the years after to fund the North East Link, Melbourne Airport rail and removal of an additional 25 level crossings by 2025.

To rake in a little more cash, the government is targeting the top end of town, with tax hikes for foreign investors, luxury car owners and gold miners.

Mr Pallas defended the changes, saying tax increases had to be done in a way that did not cause a substantial burden to the broader community.

“But if you can buy a $200,000 Maserati I don’t think you’re going to be particularly fazed by a small increase in the motor vehicle duty,” Mr Pallas said.

The government is again changing payroll tax, dropping the regional rate and increasing the business tax-free threshold to $700,000.

Originally published as Victorian Budget offers surplus and fulfils election promises