Families and vulnerable people feeling the pinch of cost of living have been offered a small boost in a stripped-back state budget reeling from soaring debt.
In her Victorian budget debut on Tuesday, titled Focused on What Matters Most, Treasurer Jaclyn Symes dug into the state coffers for a $2.3 billion cost-of-living package.
The budget handouts come despite Victoria’s state debt is projected to hit a record $200 billion by 2029 – the equivalent of $71,000 per household.
Net debt projections came in at $194 billion by mid-2029, with interest payments to service it rising to $29 million a day by that point.
This will leave less money for critical services and infrastructure such as hospitals, roads and schools.
Swinburne finance expert Jason Tian said the interest expenses were consuming about 18 per cent of state taxation revenue, effectively swallowing up all stamp duty.
Ms Symes will travel to the US in coming weeks to meet with credit rating agencies after they called for the state to demonstrate ‘fiscal discipline’.
The state was gifted an extra $3.7 billion in GST revenue from the Commonwealth Grants Commission for 2025/26, $1.5 billion higher than forecast.
Victorian Premier Jacinta Allan speaks visits journalists during the 2025-26 Victorian Budget lockup in Melbourne
Ms Symes said the government decided to deliver a smaller forecast operating surplus next financial year to fund more cost-of-living measures and service delivery, including a record $31 billion for health.
The budget does not contain an exact number of job losses stemming from a review, led by Helen Silver, of the Victorian public service.
But it banks on $3.3 billion in savings from ceasing and redesigning programs, reducing duplication and cutting about 1200 full-time equivalent positions.
‘Redundancies will be to come but they’ll not be as high as the ultimate number,’ Ms Symes said.
More savings will follow after Ms Silver’s final report is handed to the government in June.
‘What I found pretty compelling in Helen’s initial work was Victoria have over 500 entities and 3400 public boards and committees,’ Ms Symes said.
‘You can’t tell me there’s not some fat in there.’
Infrastructure spending is forecast to slide over the next four years but the total for new and existing projects has jumped $8.1 billion higher to $213 billion.
A record $31 billion in health funding has been announced in the Victorian state budget
The estimated cost of the eastern section of the Suburban Rail Loop from Cheltenham to Box Hill remains unchanged at $30 billion to $34.5 billion.
Ms Symes stuck to her word of no new or increased taxes, although the emergency services levy that has rankled firefighters and farmers will add $1.8 billion a year to the budget bottom line by 2026/27.
What’s in the budget for you?
Another round of the power saving bonus will be rolled out in August at a cost of $50 million but it is limited to a $100 discount for concession card holders.
An extra 27,000 rebates will be handed out for home owners to install electric heat pumps and solar hot water and solar hot water systems and $18 million set aside for pharmacists to treat more Victorians without a trip to the doctor.
The package includes $1.3 billion to help families and kids at school and kinder and TAFE students, including forging ahead with the state’s transition to free kinder.
The big-ticket item – $320 million in free public transport for children under 18 every day and seniors over 60 on weekends from January 1 – were unveiled in the lead up to budget day.
Premier Jacinta Allan has called getting millennials into homes the fight of her life but there wasn’t fresh housing help beyond $61 million to reduce stamp duty for off-the-plan apartments, units and townhouses for another 12 months.
The budget, titled Focused on What Matters Most, includes a $2.3 billion cost-of-living package
Ms Symes described the budget as ‘responsible’, delivering on the government’s fiscal plan and providing real help with cost of living.
‘This is support you can feel – at the kitchen table, at the school gate, at the train station,’ she will tell parliament.
KEY TAKEAWAYS FROM THE 2025/26 VICTORIAN BUDGET
* $2.3 billion in cost-of-living relief, much of it aimed at families with children aged under 18
* $3.3 billion will be slashed from the public service and a predicted 1200 full-time equivalent positions lost but details of the cuts and changes to programs are not yet known
* Net operating surplus of $600 million in 2025/26 but net debt is tipped to hit $194 billion in mid-2029 as interest payments rise to $29 million each day
* The government says health and wellbeing account for one third of expenditure
Ms Symes described the budget as ‘responsible’, providing real help with cost of living
KEY COST-OF-LIVING MEASURES
* New $100 Power Saving Bonuses for households with a concession card holders, costing $50 million
* The Camps, Sports and Excursion Fund for students who live with a concession card holder will jump to $400 per child, to the tune of $152.3 million
* An additional 65,000 Get Active Kids vouchers for families to spend on school uniforms, fees and equipment worth up to $200 per child in 2026, which costs $15 million
* Rebates for electric heat pumps and solar hot water systems, costing $30 million
* $18 million for food relief charities and supporting organisations
* Camping fees will stay half price for two more years, costing $10.5 million
* Under 16s can continue to visit zoos for free on weekends, public holidays and school holidays under a $15 million program
The budget included $240 million to boost business growth and investment in the state, including a new $150 million Victorian Investment Fund
KEY HEALTH SPENDING:
* A record $31b in health funding
* The additional $11.1 billion includes $9.3 billion for hospitals and $497 million for mental health
* $437 million to triple the capacity of the Victorian Virtual Emergency Department, which offers free consultations with doctors and nurses
* $167 million to improve ambulance response times, including recruiting more staff at Triple Zero Victoria
* $18 million to permanently allow pharmacists to provide certain medications without a doctor’s script, including the contraceptive pill, and expand which conditions they treat
KEY EDUCATION SPENDING:
* $4.9 billion in education finding, including $1.5 billion for new schools and upgrades to existing schools
* $859 million to continue Free Kinder programs for an estimated 160,000 children
* Extra $133 million in funding for core subjects including additional $47m to improve maths education, introducing a numeracy check for students in Year 1 and upskilling maths teachers
* $27 million for pathway coordinators in government secondary schools
* $319.8 million to roll out disability inclusion reforms
Victoria pledged $976 million to upgrade roads and bridges across the state in 2025/26, including fixing potholes
KEY INFRASTRUCTURE AND TRANSPORT SPENDING
* $318 million for free public transport for under 18s and $2.2 million for free public transport for seniors on weekends
* $727 million to turn on the new Metro Tunnel under the CBD, with the final opening date still unknown
* $4.1 billion to expand Sunshine Station, which will be connected to the future airport rail line and Suburban Rail Loop
* $976 million to upgrade roads and bridges across the state in 2025/26, including fixing potholes
* Extra $270 million to improve the regional rail V/Line network and $52m to increase services on three lines
KEY JUSTICE SPENDING
* $1.6 billion to roll out new bail laws, including $727 million to create an extra 1088 prison beds
* $287 million for a new Financial Assistance Scheme to support victims of crime with medical expenses, emergency financial help and counselling
* $65 million for a tobacco and liquor regulator, which has been touted as a way to crack down on the illicit tobacco trade fuelling a criminal gang conflict
KEY INVESTMENT SPENDING:
* $240 million to boost business growth and investment in the state, including a new $150 million Victorian Investment Fund
The government said health and wellbeing account for one third of expenditure
KEY EMERGENCY AND DISASTER FUNDING
* $40 million to replace Fire Rescue Victoria trucks and $17.4 million for the organisation to improve cyber security after it was hit by a cyber attack in 2022
* $10 million so the State Control Centre can run 24/7
KEY HOUSING SPENDING:
* $61 million to extend stamp duty concessions for homes on off-the-plan townhouses, units and apartments until October 2026
* $4 million to expand Mortgage Stress Victoria
KEY ENVIRONMENT SPENDING:
* $32.6 million to maintain the health of creeks and rivers, including the Murray Darling Basin
* $21.1 million to protect parks, bush and coastline
* $16.6 million in additional funding to Agriculture Victoria for emergencies and to support animal welfare
KEY INDIGENOUS AFFAIRS SPENDING:
* An extra $167 million for culturally-responsive and self-determined services in health, education and housing
