Victorians will be slugged more in taxes as the state records an increasing budget deficit of $1.4 billion (US$0.9 billion).
The budget update was released on Dec. 13, revealing a projected deficit of $3.6 billion (US$2.3 billion) in the 2024/25 financial year, due to a $1.4 billion downward revision of the net result from transactions.
It follows increased spending on the Melbourne Metro Tunnel and a $1.5 billion (US$0.96 billion) injection into the state’s hospitals.
Net debt is set to reach $155.2 billion (US$98.8 billion) by July, dropping slightly compared to the expected $156.2 billion (US$99.4 billion).
Treasurer Tim Pallas defended the deficit, saying the state will record a surplus the year after.
“Our economic future is secure,” he told reporters on Dec. 13.
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Pallas also defended plans to raise taxes.
“The state always cuts its cloth to meet the needs of the community,” he said.
Home owners will be hit with a doubling in the fire services levy, which Emergency Services Minister Jacyln Symes announced on Dec. 13.
Owners will be slugged about $60 (US$38.20) extra a year—or $1.20 (US$0.75) a week—under the changes, which Pallas blamed on increasing challenges of fire management.
“Climate change is real. Its practical impact upon people’s wellbeing is real and our capacity to affect property in what is the most fire-prone region in the world has to be subject to constant capital by government,” he said.
Symes said the SES, triple zero, Emergency Recovery Victoria, and Forest Fire Management Victoria would benefit from the levy revenue and volunteers and long-serving ex-volunteers would be exempt.
Electric car drivers will have to start paying more in 2026 with the government to scrap a $100 (US$63.7) discount for electric vehicle registrations.
The decision comes after the High Court struck down the government’s EV levy in 2023.
“It is a bit rich if we’re actually incentivising them for using the roads in circumstances where they’re not paying for the use of it,” Pallas said.
Victoria is set to “harmonise” with Sydney and hike the congestion levy from 2026 and extend the costs into Melbourne’s inner-eastern suburbs.
This could lead to cost increases to off-street private and public car parking spaces, the budget update revealed.
“These changes aim to reduce congestion and encourage the use of public transport by commuters to the CBD and inner-city areas,” the budget update read.
On-street parking, private car parking lots, universities and charities are among those exempt from the charges, Pallas confirmed.
“The aim here is to recognise that congestion is going to cost the Victorian economy about $10 billion (US$6.3 billion) a year by 2030,” he said.
Opposition Leader John Pesutto described the budget update as “annus horribilis for many businesses and Victorians.”
“It always picks off those most vulnerable—households, farmers, businesses—that are struggling to stay afloat … and they target them because they’re easy prey for a government that can’t manage money,” he said.
