Federal budget 2021: Victoria’s population to hit 7 million by 2025

Despite predictions harsh Melbourne lockdowns would deliver long-lasting damage, the Budget has predicted Victoria is in for a big boost.

Victoria’s population is tipped to surge past 7 million within four years, with the state’s growth expected to be the fastest in the country.

Despite predictions that Melbourne’s harsh lockdowns would deliver long-lasting damage, federal Treasury is backing Victoria to retain its status as the place to be, albeit with migration levels lower than before the pandemic.

The positive outlook, which sits alongside expectations that spending and economic ­activity across the nation will soar, is likely to spark a sharp increase of GST revenue.

About $17.5bn will flow to Victoria next year, rising to about $20bn a year by 2024.

This was “driven by the faster than expected recovery” from the shock of COVID-19, with the retail sector making up for steep falls in consumer spending in the accommodation and food services industries.

Victoria’s population is tipped to surge past 7 million within four years

“A significant benefit of the stronger than expected economy is increased GST payments to the states … now expected to exceed pre-pandemic levels,” the federal budget papers reveal.

Victoria’s population is forecast to surge by 364,000 within four years — or 5.4 per cent higher. This is compared to a predicted NSW population growth of just 180,000, or 2.2 per cent higher.

It would take Victoria’s population to 7.06 million, with more than 35,000 Australians expected to move here from other states in that time.

That interstate migration growth is expected to be second only to Queensland.

The projections are based on demographic data and include assumptions about the fertility rate, which is expected to dip slightly from 1.61 to 1.58 before bouncing back.

The state’s population rose by only an estimated 5000 over the past year, and is tipped to increase by 24,000 to 6.72 million by June 30, 2022.

It’s only in 2022-23 that the number of Victorians is expected to rise substantially — up 84,000 for a population of 6.81 million.

This contrasts with annual increases of around 130,000 people before the pandemic shut down global travel.

NSW is tipped to have an annual net loss of about 20,000 people to other states over the next few years, while Queensland will have net gains of a similar number.

Victoria will get about $17.5bn next year, or 24 per cent of the total GST pool.

But this should jump significantly in the following year due to population growth and further increases in consumer spending.