Victoria will “go it alone” without financial support from the commonwealth to fund the state’s $10.9bn major public transport project, the Melbourne Metro, the treasurer Tim Pallas said as he handed down his second budget on Wednesday.
The commonwealth was “rapidly disappearing from view in terms of their relevance to the people of Victoria”, he said, adamant that the state needed to “get on with it” and begin preconstruction works on public transport reform.
Funding for infrastructure, public transport, schools and health comprised the cornerstones of the Victorian budget, with $1.9bn of new investment allocated towards public transport and a separate $1.3bn directed towards improving the state’s embattled regional public transport system, on top of the $3bn allocated towards the Melbourne Metro.
The budget has money to fully fund the 9km Melbourne Metro public transport project, Labor’s alternative to the former Liberal government’s East West Link toll road project which the premier, Daniel Andrews, scrapped shortly after his election in 2014. He has been lobbying the commonwealth to reallocate $1.5bn in federal funding for the East West Link towards the project.
But the budget fully funds the Melbourne Metro without relying on the federal contribution, Pallas said. Almost $3bn over forward estimates has been allocated to progress construction of the Melbourne Metro, with the balance of the $10.9bn project to come from capital expenditure beyond the forward estimates.
Pallas said he still hoped to secure the funding from the commonwealth, but that Victoria would not be reliant on it and was not interested in being loaned the money by the commonwealth. “We’re not doing this in a belligerent way,” he said. “We just need to get on and get this done”.
Pallas boasted of the strength of the state’s finances in the days before his budget announcement, with the 2015-16 surplus of $1.9bn set to reach $2.9bn for 2016-17. Strong business confidence, strategic investment and a booming property market all contributed to the state’s strong financial position, Pallas said.
“Reflecting a stronger revenue position, the government has taken the decision to modestly increase expenditure,” he said. “Ours is the fastest growing economy in the nation. Business investment and confidence measures are strong, leading all other states.”
There will be a $1.3bn overhaul of the regional public transport system. In January, the chief executive of the state’s regional V/Line system, Theo Taifalos, resigned over mass service cancellations, lengthy delays spanning weeks, overcrowding and issues with carriage wheels that rendered some vehicles unsafe. The budget will see 170 V/Line services added, including $141 towards maintenance to improve the reliability of the network.
Meanwhile, a $6.2bn package will go towards easing congestion on major roads, including $1.46bn for the Western Distributor project and further funding for widening of the Monash Freeway. In total, $12.4bn will go towards infrastructure.
Halfway through the budget lockup, a video of Andrews boasting of the budget’s merits was played to journalists, complete with soaring music in the background. “For the state of Victoria, this is a diamond day,” Pallas told the room as the video ended.
The budget also sees a record $2.45bn investment in health funding, including a $1.63bn boost for hospitals, ambulances and health programs. A separate $356m will go towards mental health alone, including $132m towards acute care and specialist treatment, and $27.5m towards new suicide prevention initiatives.
Education is also a big winner, with $924m allocated towards building new schools and upgrading existing classrooms, the largest single investment by a Victorian government into school infrastructure. Small business will experience some relief from the budget’s $286m cut to payroll tax and an incremental raising of the tax-free payroll threshold, while a $53.1m package will recognise, celebrate and protect Aboriginal culture.
More than half a billion dollars in funding for family violence services, including bolstering the justice and child protection systems, was previously announced following the findings of Victoria’s royal commission into family violence.
Several of the other key budget allocations, including the education package, funding for mental health, and funding for a Pride Centre for LGBTI Victorians were dropped to the News Corp Australia and Fairfax Media papers in the days leading up to the budget announcement.
Andrews told reporters the theme of the budget was “getting it done”.
“Since we came into office, more than 112,000 new jobs have been created,” he said. “Industries are transitioning, but this government will healp affected workers gain new skills and get a fresh start.
“Across roads, rail, schools and hospitals, we are investing in what Victoria needs now, while helping create thousands of local jobs.”
When Labor came into office, the unemployment rate was 6.6%, he said, which had fallen to 5.7%.
However the opposition leader, Matthew Guy, said it was the former Liberal government that had booked in more than $5bn for the future sale of the Port of Melbourne. He told ABC radio on Wednesday morning that Victorians were tired of the government engaging in “cash giveaways and spin”.
“People want the government to actually deliver and, more to the point, deliver for the long term, not just governing for now.” He added that the strength of Victoria’s economy was a result of initiatives of the previous Liberal government.
