In brief
The 2025-26 Victorian State Budget was delivered on 20 May 2025 by Treasurer Jaclyn Symes.
This year’s Victorian Budget seeks to provide cost-of-living support to families, while dedicating funds to improving infrastructure, healthcare and education.
The Victorian Government expects to return an operating surplus by 2025-26 with net debt as a percentage of its Gross State Product (GSP) to stabilise and begin to decline by the end of the forward estimates period.
The Government anticipates total revenue in 2025-26 of $108.3bn, growing by an average of 2.6% per year up to 2028-29, driven mainly by higher goods and services tax (GST) revenue and State taxation revenue. Taxation revenue is expected to be $41.7bn in 2025-26 growing by an average of 4.7% a year up to 2028-29. Total expenditure is expected to be $107.7bn in 2025-26 growing by an average of 2.3% a year, reaching $115.4bn in 2028-29.
In detail
Net debt and GSP
The net debt to GSP ratio is a measure of the State’s debt compared with the size of the economy and provides an indication of the State’s ability to service its debt. The Budget focuses on stabilising and reducing the net debt to GSP ratio, alongside investments in frontline services and cost-of-living help for Victorian families.
Net debt is projected to be $155.5bn as at June 2025 and is forecast to increase to $185.2bn by June 2028. As a proportion of GSP, net debt is projected to be 25.2% in June 2027 before reducing to 25.0% by June 2028 and then declining further to 24.9% by June 2029.
Expenditure
Cost of living and housing
The Victorian Government is seeking to aid the cost of living with a $2.3bn investment, including $529m to help expand access to free healthcare and reduce out-of-pocket expenses and $156m in cost-of-living supports to help manage household expenditure.
The Victorian Government has also provided $407m to support the development of land for housing, continuing stamp duty concessions (such as the land transfer duty concession for off-the-plan apartments, units and townhouses for a further 12 months), and support for those experiencing homelessness.
Education
The Victorian Government is investing $4.9bn in schools and early childhood education, including $1.5bn for new schools, school upgrades and maintenance and $2bn in Victoria’s Best Start, Best Life early childhood education reforms, including Free Kinder for three and four-year-olds Statewide.
Transport and infrastructure
The Budget provides funding to operate and maintain new transport infrastructure, including:
$4.1bn to begin development of the Sunshine Station, the first step in delivering the Airport Rail
$976m to fixing and resurfacing roads under the ‘Better Roads Blitz'
$727m to open and operationalise the Metro Tunnel
$1.2bn to maintain and improve Victoria’s public and active transport network, including $46m to deliver additional train services on the Craigieburn, Sandringham, Upfield and Werribee lines, and
$320m to make public transport free for children under the age of 18 (with the introduction of a new youth Myki from 1 January 2026), and for seniors on weekends.
Healthcare
The Government is investing $11.1bn on the State’s healthcare system, including $634m to open and operationalise nine new or expanded hospitals.
Business
The Budget provides $627m to help businesses find new opportunities to expand and attract investment, including a $150m Victorian Investment Fund to grow important sectors, promote regional economic growth and a further $35m to deliver programs to small and medium-sized business.
The Victorian Government has disclosed that more than 3,700 properties have moved to the new commercial and industrial property regime and expects businesses to pay $457m less in stamp duty between 2025-26 and 2028-29.
Justice
The Victorian Government is investing $1.6bn into the justice system, committing $297m to child protection and family services system, $290m to support victims of crime, $206m to improve capability and capacity of Victoria’s emergency services, and $172m to support the prevention of and response to sexual and family violence.
Revenue initiatives
Emergency Services and Volunteers Fund
On 15 May 2025, the Victorian Government passed the Fire Services Property Amendment (Emergency Services and Volunteers Fund) Bill 2025, replacing the Fire Services Property Levy with the Emergency Services and Volunteers Funding Levy (new levy) and expanding the services eligible for funding through the new levy. The new levy will result in an increase to the fixed charge under the Fire Services Property Levy Act 2012 and will be charged annually alongside council rates from 1 July 2025.
The Victorian Government expects to raise $1.6bn from this initiative in 2025-26, increasing to $1.8bn per year from 2026-27.
The takeaway
The 2025-26 Victorian Budget is focused on developing and repairing infrastructure and the healthcare system while easing the cost-of-living pressures. No new revenue-raising initiatives were handed down in the Budget that had not already been announced.
Barry Diamond
George Papadakos
Emma Hassaram
Lloyd Bittar
Prisca Hadikusumo
Henna Ibrahim
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