‘Desperate cash grab’: Treasurer strikes deal to double fire levy, days out from budget – at a cost

A last-minute deal to double the rate of the fire services levy has protected the Victorian government’s budget surplus, but will cost millions in expected revenue.

Treasurer Jaclyn Symes confirmed on Thursday that the government had struck a deal with crossbench MPs to pass legislation that expands the tax into a broader Emergency Services and Volunteers Fund (ESVF), doubling variable rates on households and farmers.

Victorian Treasurer Jaclyn Symes.Credit: AAP

To secure crossbench support, Labor agreed to amend the bill, dropping the levy rate for farmers from 83¢ for every $1000 of a property’s capital improved value to 71.8¢. It is currently 28.7¢.

The government will push the legislation through parliament on Thursday, preventing a significant challenge to the state budget, which will be released on Tuesday and accounts for the increased tax revenue.

The higher rates are expected to kick in on July 1.

The United Firefighters Union (UFU), state opposition and farmers have campaigned against the change, arguing it disproportionately hurts drought-stricken parts of regional Victoria and does not provide enough certainty to firefighters.

Residential charges, which appear on rates notices, will still grow as planned from 8.7¢ for every $1000 of a residential property’s capital improved value to 17.3¢.

Victoria will legislate that 95 per cent of State Emergency Service (SES) funding, 95 per cent of Country Fire Authority (CFA) funding and 90 per cent of Fire Rescue Victoria (FRV) funding come from the ESVF.

The law will require that all levy funds be spent on emergency services, with annual reports on how funds are collected and spent.

Partial rebates will be available for farmers eligible for the government’s drought support package. The agriculture minister will announce an expanded package for drought-affected farmers soon.

When the plan to increase the levy was announced by then-treasurer Tim Pallas in December, it was forecast that the hike would bring in $1.8 billion by 2028, compared with $1.033 billion currently.

In that same budget update, Victoria was forecast to post a $1.6 billion operating surplus in the 2025-26 financial year, which would be the state’s first surplus since before the pandemic.

Symes said her department was now calculating the impact of the amended rates and drought relief package on the budget.

When asked whether the amended rates would pare back the surplus figure, she said: “I’m good, mate.”

“It is a new cost, no one likes paying more,” the treasurer continued.

“We’re hearing that from different communities.

“Hopefully those conversations [with the crossbench] have been productive to produce a result that the legislation is passed.

“It is an investment from the community to pay back into emergency services to protect them.”

Symes said she had worked with the Victorian Farmers Federation on the impact of the levy on farmers, which prompted her to reduce the variable rate.

“If the ESVF bill passes, we will ensure that there is a system where farmers that are in those impacted LGAs will not have an increase on their levy whilst it is in drought,” she said.

Shadow treasurer James Newbury said the Coalition would fight the government to stop the levy.

“We are going to use every mechanism in our power in this parliament, in the lower house and in the upper house, and all of our members are going to do everything we can to side with Victorians against this great big new tax,” he said.

“We’re going to stay as late as we can.”

The levy will also fund a $40 million program to replace FRV’s fleet of trucks, joining an existing scheme to upgrade the CFA and SES fleets.

UFU secretary Peter Marshall said he did not support the changes and accused the government of using the levy to cover its debt concerns.

“The Allan Labor government has made a desperate cash grab to paper over its financial mismanagement, and Victorians – taxpayers, firefighters, home owners, businesses and renters alike – are going to pay the price,” he said.

Victorian Greens leader Ellen Sandell said her party had pushed for significant changes to the original levy bill.

“These changes mean farmers experiencing hardship from drought will be exempt from the increased levy; firefighters will have proper secure and ongoing funding, including to replace their ageing trucks; and amendments will ensure every dollar goes to emergency services and can’t be spent to plug government budget holes,” she said.

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