Victorian Budget 2018-19: Summary

Published: 02 May 2018

Victorian Budget 2018-19: Summary

This week the Victorian Treasurer, Tim Pallas, handed down his fourth Victorian Budget, the final before November’s State Election. The 2018-19 Budget has set the pace for the nation, providing $40 billion of firm infrastructure funding over the forward estimates. The record investment is built off the back of prudent financial management and the windfall gains from continued asset recycling.

In a move welcomed by industry, the Budget confirms the next two phases of the Suburban Roads Upgrade Programme with $2.2 billion for availability-based Public Private Partnerships (PPPs), as well as significant funding for other transport and social infrastructure.

Key fiscal and economic indicators

The Victorian Budget 2018/19 builds on our state’s success, including the fastest rate of economic growth of any state in Australia.

  • Victoria’s economy grew by 3.3 per cent in 2016/17, well above national economic growth of 2.0 per cent.
  • Real Gross State Product (GSP) is expected to remain strong but slow marginally from three per cent in FY2017-18 to 2.75 per cent in FY2018-19, and is expected to remain at 2.75 per cent in each year of the forward estimates
  • The 2018/19 operating surplus is estimated to be $1.4 billion, with surpluses averaging $2.5 billion over the forward estimates
  • More than 333 900 have been created since the Labor Government came to office, with employment growing at an above-trend rate for four years
  • Net debt as a proportion of GSP is expected to be 4.6 per cent for FY2017-18, before rising to six per cent by FY2021-22.
  • Victoria remains one of only 10 sub-sovereign governments in the world to receive a triple-A credit rating from both S&P and Moody’s.

The 2018-19 Victorian Budget contains an overall spend of $1.3 billion for acute health infrastructure, committing funding to a number of major upgrades to Victoria’s hospitals and medical facilities, including:

  • $461.6 million for the expansion and redevelopment of the Ballarat Base Hospital;
  • $320 million for the Victorian Heart Hospital this year, bringing total project funding to $543 million;
  • $115 million to the Wonthaggi Hospital expansion;
  • $69.5 million to the Alfred Hospital;
  • $50 million to the Regional Health Infrastructure Fund; and
  • $29.6 million to the Sunshine Hospital emergency department.

A new hospital in Footscray appears in the 2018-19 Budget estimates, but funding is yet to be confirmed.

Education and Skills

The Budget commits $1.3 billion to education infrastructure for new and upgraded schools across the State. The education commitments contained in the 2018-19 Victorian Budget include:

  • $482.8 million for school upgrades;
  • $273.4 million for new school construction;
  • $155.1 million for land acquisition; and
  • $17.2 million for planning for schools.

    The Victorian Government has also allocated $172 million over the forward estimates to make 30 priority TAFE courses available to students free of charge, including courses in construction and engineering, including:

  • Electrotechnology (Career Start) Certificate II
  • Electrotechnology (Pre-Vocational) Certificate II
  • Plumbing (Pre-Apprenticeship)
  • Certificate IV in Engineering
  • Certificate IV in Plumbing and Services

Acknowledging the extensive infrastructure delivery programme along Australia’s east coast, the 2018-19 Budget outlines measures to ensure there will be a sufficient supply of skilled labour to support the ongoing infrastructure pipeline. To support this skills development, the Victorian Government has created the Major Projects Skills Guarantee which requires at least 10 per cent of work on major projects to be carried out by local apprentices, trainees and engineering cadets.


The 2018-19 Budget has committed $769 million to new capital investment in the justice and regulation sector.  Of this, $689 million has been allocated to construct a new 700 bed maximum security prison at the Lara Prison Precinct. This is in addition to the 470 additional beds that were announced across the State last year.

Sport Infrastructure

The Budget confirms the Victorian Government will partner with the AFL to deliver the $225 million redevelopment of Etihad Stadium Sports and Entertainment Precinct. The AFL currently owns the stadium and the financial arrangements of the partnership were not detailed in the Budget papers.

AMCA Summary

Overall, the fourth budget from the Andrews Labor Government provides a national leading pipeline of work for the building and construction industry, resulting primarily from capital works projects across the health, education, justice and sports infrastructure sectors.

AMCA Victoria also commends the government for its ongoing focus on TAFE and the broader VET sector, with $304 million allocated to help more students access training. This includes $120 million to upgrade and modernise three TAFE facilities in regional Victoria; $44 million to modernise apprenticeships, including the introduction of independent assessments and updated learning materials; $49.8 million for Head Start Apprenticeships and Traineeships to give secondary school students the opportunity to learn their trade at school; and $25.9 million to improve the quality of secondary vocational pathways.

The AMCA will continue to work towards closer cooperation between government, TAFE institutions and industry stakeholders to deliver better outcomes for both students and AMCA member employers.