By Ginika Igboke
Jaclyn Symes has delivered Victoria’s final budget before the 2026 election, projecting the state’s net debt will reach $165.3 billion by June 2026, with further increases expected in the years ahead.
According to the budget’s financial outlook, debt is forecast to rise to $175.6 billion by June 2027 and approach $199.3 billion by 2030, highlighting growing fiscal pressure in Australia’s second most-populous state.
Deficits Persist Despite Claimed Surplus
The state is projected to record a $7.7 billion deficit in 2026–27, widening to $8.1 billion by 2029–30.
While the government has pointed to an operating surplus of $700 million in 2025–26—rising to $1 billion the following year—this figure excludes infrastructure and capital spending. When those costs are included, the budget remains firmly in multi-billion-dollar deficit territory.
Cost-of-Living Measures Introduced
Despite rising debt levels, the budget includes several initiatives aimed at easing financial pressure on households:
- A 20 percent cut to vehicle registration fees, with rebates of up to $186
- Temporary halving of public transport fares
- Free public transport for children under 18
- Expanded access to free dental and vision care for children
In infrastructure, $674 million has been allocated to build 25 additional trains in Ballarat.
Major Investments in Health, Education, and Housing
The budget outlines significant spending across key public services.
Health
A record $32 billion has been allocated to health, including $3.9 billion in new funding. This includes:
- $2.1 billion for hospitals and workforce support
- $567 million for health infrastructure
- $133 million for hospital-in-the-home programs
- $299 million for maternal and family health services
Additional funding includes $95 million to upgrade the emergency department at Werribee Mercy Hospital and $10 million for urgent care clinics.
Education
Education spending totals $19 billion for 2026–27, with $5.5 billion in new investment. Key measures include:
- Nearly $500 million to expand early childhood education, including free kindergarten for three- and four-year-olds
- $104 million to acquire land for new schools in growing regions
- $419.6 million for new schools and $511.5 million to upgrade existing ones
- $522.8 million for school maintenance
Social Housing
The budget includes $860 million for a social housing growth fund, expected to deliver 7,000 new homes.
Government Cites Economic Pressures
Victorian Premier Jacinta Allan said the measures are designed to support families facing cost-of-living challenges.
Symes added that the state economy is expected to continue growing, driven in part by technological advancements and innovation.
Opposition and Industry Criticism
Opposition parties have sharply criticized the budget, warning of rising debt and increasing interest repayments. The Victorian Liberals argued that the state could soon spend more on servicing debt than on essential services such as policing, ambulance services, and early childhood programs.
Industry leaders also expressed concern. Tim Piper said the budget fails to adequately control spending, noting that billions in additional expenditures and contingency funds could further strain finances.
He also warned that credit rating agencies have flagged potential risks, particularly as annual debt servicing costs are projected to approach $12 billion.
Fiscal Challenges Ahead
With debt climbing and deficits projected to persist, Victoria’s financial outlook remains a central issue heading into the 2026 election.
The government maintains that its spending priorities balance economic growth with cost-of-living relief, while critics argue the long-term sustainability of the state’s finances is increasingly at risk.
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