2015-16 Victorian Budget
The Hon. Tim Pallas, Treasurer of Victoria has presented the Andrews Government’s first budget. The summary outlined below contains the main elements for the property industry. Further analysis on the implications of the budget will be provided over the coming weeks.
Importantly, don’t miss your opportunity to hear the Treasurer discuss these budget announcements, investment priorities and the Government’s economic agenda at the Property Council’s Business Breakfast on 12 May. Register your seat now!
Property Council media release: A budget for cranes, steamrollers and TBMs 
Victorian Economic Overview
- The 2015-16 Budget will deliver an estimated surplus of $1.2 billion, growing to $1.8 billion in 2018-19;
- Victorian gross state product to grow by 2.5 per cent in 2015-16 from 2.25 per cent in 2014-15;
- Growth in the labour market since 2014 is expected to consolidate, with the unemployment rate forecasted at 6.25 per cent for the next two years; 
- Net debt is forecast to be 4.4 per cent of the Gross State Product;
- Revenue expected to grow by 3.4 per cent; and,
- AAA credit rating maintained.
General Taxation
- Overall payroll tax revenue: $5.4 billion, up by 5 per cent from 2014-15*;
- State taxes are expected to grow by 4.1 per cent to $19 billion in 2015-16, with strong stamp duty revenue offsetting weakness in income and consumption based taxes;
- Overall stamp duty revenue: $5 billion, up by 13 per cent from 2014-15*;
- Overall land tax revenue: $1.8 billion down by 7 per cent from 2014-15*;
- Top land tax rate: remains at 2.25 per cent;
- Top stamp duty rate: remains at 5.55 per cent;
- Land tax revenue to decrease by $133.9 million*;
- Stamp duty revenue to increase by $587.5 million*;
- Property tax revenue to increase by $7.2 million in total*;
- Congestion Levy (Car Parking Tax) to decrease by $2 million*; and,
- Metropolitan Planning Levy, which was announced in 2014 as a levy to fund the Metropolitan Planning Authority, will take effect from 1 July 2015 and raise $17 million in 2015-16.
*Calculated using 2014-2015 Budget and 2015-2016 Budget figures.
New Foreign Residential Investor Tax
The Property Council is opposed to the Government’s 3 per cent surcharge on residential property purchases and an additional land tax surcharge of 0.5 per cent for property owners who do not reside in Australia and are not an Australian, New Zealand citizen or permanent resident.
The new taxes are intended to raise $330 million over the forward estimates. The Property Council has been liaising with the Treasurer’s office since the announcement of the new housing tax and has secured a high level meeting next week to discuss its negative consequences.
Rail
- $2.4 billion for removal of level crossings
- 17 crossings have been identified
- All nine between Dandenong and Caulfield to commence
- $1.5 billion to complete the planning and design for Melbourne Metro Rail Project;
- $.5 million to upgrade level crossings in regional Victoria; and
- $9 million develop and plan the Mernda Rail Link; and
- $220 million for Murray Basin Rail Project.
Roads
- $1.8 million to kick start work to streamline traffic flows on Hoddle Street;
- $3.8 million to start planning upgrades of Bolton Street in Eltham, Yan Yean Road in Plenty, Napier Street in Bendigo and the Drysdale Bypass.
- $20.5 million to commence the duplication of Thompsons Road in two sections;
- $31.4 million for the Road Minor Works Package;
- $40 million for the constructing the first stage of the West Gate Distributor project;
- $76 million for 23 projects of key freight corridors;
- $110 million to upgrade the Chandler Highway bridge;
- $1 million for the next stage of the M80 Upgrade;
- $86.7 million to resurface roads across Victoria and $.2 million for road and rail network works; and
- $75.8 million to strengthen bridges on key logistics routes in regional Victoria;
Planning
- $ million to create of an Interface Councils Infrastructure Fund to assist councils on the outer suburban interface.
- $1 million of funding to address the backlog of development applications;
- $1 million to fund a dedicated trust and consultation regarding protecting the Yarra River against development;
- Approximately 4 state significant heritage places to be audited for further protection requirements;
- All documents informing planning decisions for developments over 25,000 sqm to be made available to the public;
- $1 million to review the Local Government Act 1989 with the aim of modernising the relationship between State and local government and reducing red tape; and
- $ million to Rural Councils Victoria to aid councils in making decisions on complex planning applications;
Healthcare, Education and Community Infrastructure
- $28.7 million for Super Pharmacies;
- $55.4 million to redevelop the State Library;
- $70 million to build a new grandstand at Geelong’s Stadium;
- $85 million to redevelop and expand Werribee Mercy Hospital;
- $106.3 million for expansion of Casey Hospital; and
- $200 million for a new Western Women’s and Children’s Hospital;