Summary

  • Victorian Treasurer Tim Pallas is handing down a landmark pandemic budget today, with debt expected to soar as the government seeks to steer Victoria out of its COVID-19 recession.
  • Premier Daniel Andrews vowed to deliver the ‘biggest and most significant’ budget in Victoria’s history after lockdowns designed to stop coronavirus spreading decimated the state’s economy.
  • Almost 200,000 jobs have disappeared since the pandemic took hold in March, while another 100,000 people have left the job market altogether. The key ‘state final demand’ measure shows a $10 billion drop in economic activity has dragged the Victorian economy back to where it was in the March quarter of 2017.
  • The government this morning announced $3 billion in funding to build new schools and committed $10 million to plan an upgrade of the Royal Melbourne Hospital.
  • The schools funding boost follows previous announcements on an airport rail link, a faster Geelong rail service, the suburban rail loop and social housing.

What interest groups want from this 'landmark' budget

Interest groups have put together wish lists designed to get more people back into jobs and stimulate the state's economy. State political reporter Sumeyya Ilanbey spoke to each of them earlier this month. Here's what they want:

Victorian Chamber of Commerce and Industry

The payroll tax threshold would be increased to $1 million (from $650,000), and its liabilities for employers with payrolls of up to $10 million in 2019-20 would be waived this financial year, under a bold plan put forward by the Victorian Chamber of Commerce and Industry.

A closed coffee shop during Melbourne’s first coronavirus lockdown in April.Credit:Justin McManus

The powerful business lobby group wants the government to focus on protecting and growing local business and jobs, "reclaim" the state's global reputation and define and implement the next big build when it hands down its budget later this month.

The chamber has made more than 50 recommendations to the Andrews government, including grants of up to $50,000 to offset business costs associated with becoming COVID-safe, and providing one-off grants of up to $20,000 to sole traders.

Victorian Farmers Federation

The VFF has its sights on the completion of the Murray Basin Rail Project, $30 million to extend the Agriculture Energy Investment Plan and $10 million to match the Commonwealth's commitment for the On-Farm Emergency Water Infrastructure Rebate Scheme.

Property Council of Australia

The Property Council is arguing for a planned return to the office, extending planning permits and fast-tracking new ones, stamp duty concessions for first home owners and off-the-plan investors, a build-to-rent package and extending the HomesVic program.

Public Transport Users Association

Boosting public transport services across the day, detailed planning for the Metro 2 rail tunnel and funding "relatively cheap but effective" infrastructure projects, such as short tram extensions, accessible tram upgrades and better pedestrian facilities, should be a priority for the government, the association's Daniel Bowen says.

Mr Bowen also wants more funding for regional rail upgrades, including the Murray Basin Rail Project.

Environment Victoria

Before the coronavirus pandemic took hold in Australia, this year began with some of the most destructive bushfires in the country's history.

Environment Victoria is calling for large investments in energy efficiency and switching from gas to electricity, modernising the electricity grid with more energy storage, expanding the Latrobe Valley Authority to support the region's transition from coal, funding that enables the Portland aluminium smelter to start running on clean energy and landscape management for bushfire-affected areas as well as protecting riverbanks.

Australian Medical Association

The peak medical body has asked the Victorian government to consider a dramatic overhaul of the state’s public health system to reflect a NSW-style model by establishing a number of smaller units across the state.

In NSW, locally focused public health units were established over three decades, with some concentrating solely on containing and preventing infectious diseases, while others tackle immunisation and prevention of chronic diseases such as diabetes, cancer and obesity.

Read more from key interest groups here.

Victorians promised the 'biggest and most significant' state budget

Premier Daniel Andrews has vowed to deliver the "biggest and most significant" budget in Victoria's history after lockdowns designed to stop coronavirus spreading decimated the state's economy.

Almost 200,000 jobs have disappeared since the pandemic took hold in March, while another 100,000 people have left the job market altogether. The key "state final demand" measure shows a $10 billion drop in economic activity has dragged the Victorian economy back to where it was in the March quarter of 2017.

Premier Daniel Andrews and Treasurer Tim Pallas.Credit:Getty Images

"[The budget] will all be about skills and jobs, confidence, investment, making sure that there's a real spark in the Victorian economy and that we've got that momentum to take us through 2021," Mr Andrews said last month.

"Not just to repair the damage that this virus has done to all of us, as an economy, as communities, as families, but a plan to be better and stronger because of 2020."

Major upgrade for Royal Melbourne Hospital

Also this morning, the government has announced the Royal Melbourne Hospital will undergo a major upgrade, with a new campus to be built.

In a staged development expected to cost billions, a new hospital campus will be established in the Arden Renewal Precinct in North Melbourne, alongside a new campus at the Royal Women’s Hospital.

A major upgrade has been slated for the Royal Melbourne Hospital.Credit:Pat Scala

The new hospital campuses and research institutes will be linked via the Metro Tunnel project’s Parkville and Arden stations. The Arden Street campus is likely to provide outpatient services along with a research centre to free up capacity the Parkville site while it is redeveloped.

Health Minister Martin Foley told radio station 3AW the state government has committed $10 million for the planning of the project. No funds have been allocated yet to build it.

"It would be fair to describe as kick-starting the planning stages to make sure that we then bring together the two campuses in what will be the largest health infrastructure precinct in Australia," Mr Foley said.

"And to then look to, with the greatest affection for the current sites, redevelop that rabbit warren down at Parkville."

The project comes as part of the highest spending Victorian budget in history, which will be unveiled in a matter of hours.

"With record low interest rates and a year like no other this is the time for a budget like no other," Mr Foley said.

About $75 million will also go towards design, early planning works and land acquisition for a new 24-hour hospital in Melton, in Melbourne’s north-west.

$3 billion funding boost for state schools

We begin this morning with at least two major budget announcements. Firstly, the government has pledged $3 billion to build and upgrade state schools.

Premier Daniel Andrews wasted no time this morning at Thornbury High School in announcing the funding ahead of the official budget release.

Victorian Treasurer Tim Pallas will deliver his formal budget speech in Parliament about 1.30pm.Credit:Simon Schluter

Our reporting team has been poring over the documents since 8.30am in the budget lock-up at the State Investment Centre, ready to let you know all the details of this landmark pandemic budget.

(Yes, the breakfast catering at the Melbourne budget lock-up is traditionally very good.)

The embargo lifts (and our reporters are freed) when Mr Pallas stands to make his formal budget speech at State Parliament, which is due about 1.30pm. In the meantime, we will be looking at some of the budget announcements made so far, as well as what we have been told to expect. Stay with us.

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