Victorian Budget: investing further in lifting the economy out of recession
The 2020-21 Victorian Budget sees the government investing further in lifting the economy out of recession.
The Victorian Government’s budget for 2020-21 projects an operating deficit of $23.3 billion, to follow a deficit of $6.5 billion for 2019-20. However, despite projected infrastructure investment of more than $75 billion over the forward estimates period to 2023-24, government net debt is not expected to exceed 30 percent of gross state product during that time.
This infrastructure investment includes $5 billion for the Melbourne Airport Rail Link and $2.2 billion for the Suburban Rail Loop, with construction expected to commence on these projects in 2022. The expectation is that new transport infrastructure construction will directly create jobs and thereafter indirectly support employment by enhancing the state’s productivity.
We are pleased to see the commitment to invest $5.3 billion in social and affordable housing, constructing 12,000 additional homes for those on lower incomes. There is also a further $1.9 billion for construction of new buildings for schools.
The Jobs Plan includes the New Jobs Tax Credit program. This will be welcomed by eligible small-to-medium employers, who will receive a 10c Victorian payroll tax reduction for every dollar by which the 2020-21 and 2021-22 Victorian payrolls exceed that of the previous year.
The Jobs Plan’s targeted assistance for women seeking to return to the workforce stands as recognition of the impacts that the pandemic has had on sectors where women typically make a large contribution. The government has complemented this with a commitment to a pilot project for providing paid sick and carer’s leave to casual workers, recognising the potential benefit for the whole community of workers not having to choose between their health and a day’s pay.
In directing more than $850 million in additional funding to mental health programs, the Budget recognises that the pandemic may have a legacy that requires significant resources to manage over the longer term.
This Budget rightly focuses on the necessary priorities for repairing the state’s economy in the near term, and on building physical and social infrastructure that will sustain growth over the longer term. In due course, we look forward to the government considering tax reform measures that could enhance Victoria’s productivity still further.