Victoria’s fire levy to double as budget deficit blows out by $1.4bn, budget update shows

Victorian homeowners will be hit with a doubling in the fire services levy and parking fees will be jacked up — the latest tax grab coming as Treasurer Tim Pallas reveals the state’s budget deficit has blown out by $1.4bn over the financial year.

Treasurer Tim Pallas has revealed Victoria’s deficit has blown out by $1.4bn over the financial year. Picture: NewsWire / Aaron Francis

Victorians will be slugged with higher taxes and fees to pay for emergency services and help drive down government debt.

In a major blow to Victorian households, Treasurer Tim Pallas has revealed that the state’s fire services levy will be almost doubled and parking fees will increase across Melbourne’s inner suburbs.

The new revenue grabs were unveiled in a mid-year budget update on Friday which shows the state’s deficit had grown by $1.4bn for this financial year.

The deficit, originally forecast to be $2.2bn for 2024-25, has now grown to $3.6bn.

The government, however, is still forecasting to return to an operating surplus in 2025-26.

Net debt has dropped slightly, coming in at $155.2bn this financial year compared with $156.2bn forecast in the May budget.

It is now expected to reach $187.3bn in 2028, $500m less than previously forecast.

Pressed over why the government couldn’t find cash in the pool of current funding, Mr Pallas said “the state always cuts its cloth to meet the needs of the community”.

“We need to have a greater capacity to... protect the Victorian people,” he said.

Victorian Treasurer, Tim Pallas and Victorian Premier Jacinta Allan. Picture: Getty Images

The Fire Services Property Levy will be replaced by a new Emergency Services and Volunteers Fund (ESVF) from July 1, 2025.

On Friday, Emergency Services Minister Jaclyn Symes said the new levy would support more agencies including VICSES, Triple Zero Victoria, the State Control Centre, Emergency Management Victoria, Emergency Recovery Victoria and Forest Fire Management Victoria, in addition to the CFA and Fire Rescue Victoria.

Ms Symes said the overhaul of the levy would better support the state’s emergency services as they faced more demand.

“Whether its fire, floods, or weather due to climate change what we are seeing is more severe and more regular disasters and demand on our emergency services,” she said.

“Year-on-year we are seeing increases in relation to the emergency service incident we attends.”

“There has been more than 100 per cent increase in the amount of flood and storm activities that the SES has had to respond to in just 12 months alone.”

In the May budget the fire services levy was predicted to rake in more than $4 billion.

The budget update revealed the new levy, which appears on homeowner’s rates notices, will now rake in $6.27 billion over the next five years, including a whopping $1.8 billion in 2027/28.

The state’s fire services levy will be almost doubled. Picture: David Crosling

Ms Symes admitted the new levy would require legislative change and would need to be rushed through the parliament early next year to be in place in time.

She encouraged the Greens and the Coalition to support the move.

The government said the new levy would also help fund a new $250 million package to support CFA and VICSES volunteers across the state.

This included $53 million in a modernised VicEmergency app and $30 million to deliver training and support programs.

Motorists will also be hit with higher parking fees in suburbs along the city fringe.

“The congestion levy is effectively a levy for the use of commercial carparking, or indeed business provided staff carparking,” he said.

“There are carve outs under the under congested levy for street on street parking, private carparking lots.

“The aim here is to recognise that congestion is going to cost the Victorian economy about ten billion a year by 2030 is the estimate.”

Opposition Leader John Pesutto called the levy increase a “massive tax grab”.

“We can see from these papers that there is a massive tax grab, that the fire services levy tax will be increased to obtain more than $2 billion out of households, commercial operators, industrial operators and farmers,” he said.