Families, health and education received the bulk of new funding in the first Labor budget delivered by Victorian treasurer, Tim Pallas, on Tuesday.
The much-anticipated education funding boost includes $688m for new and upgraded schools, and $325m to renovate 67 rundown or overcrowded schools.
But despite touting Labor’s $3.3bn education spend as the biggest investment in the sector in Victoria’s history, the final two years of the Gonski reforms remain unfunded.
Pallas said this was because the federal government had not committed to providing its share, but the Victorian government would continue to lobby for it.
Pallas said the budget would deliver a surplus of about $1.2bn in 2015-16, rising to $1.8bn by 2018-19, which was $1bn lower than projections by the former government.
The unemployment rate was projected to fall to 5.75% in 2018-19, he said. Victoria had the third highest unemployment rate in the country at 6.2%.
The budget allocated $151m towards individual support packages to help young people with disabilities.
And agencies supporting women and children fleeing family violence who are at high risk of homelessness will receive an immediate $7.5m funding boost. Overall, $283m has been allocated over four years for programs and services targeting families, children and young people.
Nearly $1.4bn will be spent on health, via hospitals, ambulances and health programs. The government predicts it will help hospitals admit an extra 60,000 patients each year.
The Australian Medical Association Victoria president, Dr Tony Bartone, said he was pleased overall with the allocation towards health, in particular the almost $400m for hospitals in Melbourne’s growth corridors such as Sunshine, Casey and Werribee, and $25m for cardiac services.
“AMA Victoria is particularly pleased to see the government’s commitment to a real-time prescription drug monitoring system,” Bartone said.
However, he was disappointed no funds went to IT systems in public hospitals and general practices.
“This can’t be put in the ‘too-hard basket’ [because] health IT is a vital investment and it is a glaring omission in the budget,” he said.
Pallas also claimed the government’s investment in public transport was the largest in the state’s history: $2bn going towards 27 new trains and 20 new trams.
Fifty level crossings will be removed over the next eight years, addressing a key plank of Labor’s election platform.
Another key pledge, the Melbourne Metro rail project, will get $1.5bn over four years, although the source of the rest of the required funding is still unclear given the federal government is still wedded to the scrapped East West Link road project.
“We’re no longer stacking the decks in favour of the projects that don’t stack up, projects like the East-West link, which the Victorian people rejected fair and square,” Pallas told parliament after the budget lock-up.
“That’s why we cleaned up the mess, so we can get on with the projects that our state needs. Ones that will move workers and goods cheaply and reliably over time.”
The Greens, however, criticised this for being inadequate for Melbourne’s creaking public transport system, and the total infrastructure spending, at $22bn, is smaller than the previous Coalition government.
And while Labor had previously promised $600m for a rail extension to Mernda, in Melbourne’s north-east, only $9m was allocated towards that in the budget, which will go towards planning.
The budget has pushed a further $156m into Victoria’s criminal justice system, with average daily prisoner numbers set to reach up to 7,300 in the coming year.
Seven homelessness services due to close on 30 June will be kept open through a $40m allocation which will provide additional crisis accommodation for women and children fleeing family violence.
“Year on year homelessness services in Victoria are seeing demand increasing by 6% to 7%,” said Jenny Smith, chief executive of the Council to Homeless Persons.
“We can’t continue to stand still while homelessness is growing. The next budget must tackle our housing affordability and homelessness crisis.”
Vecci, Victoria’s business lobby group, said the budget delivered on Labor’s election commitments but that future budgets needed to lessen the burden of payroll tax.
Losing out are foreign investors, who will pay extra taxes to buy property in the state once a stamp duty tax – 3% of the purchase price of a house – comes into effect on 1 July. A land tax surcharge – an extra 0.5% from 2016 – will raise about $52.5m for the state.
Michael O’Brien, the opposition treasury spokesman, said: “This budget demonstrates yet again that Labor cannot manage money and cannot manage major projects.
“This budget has no detailed economic plan to create the jobs of the future for Victoria. Instead, it’s the story of a government that has no plan to grow jobs.
“Under Daniel Andrews, Victoria’s economy is stalling. Unemployment will be higher for longer. Economic growth is falling. Inflation and cost of living pressures are up.”
The Greens energy spokeswoman, Ellen Sandell, said the budget also failed to offer any action to tackle climate change.
“The treasurer didn’t mention climate change once in his speech, which shows his priority is still to prop up the dirty coal industry,” Sandell said.
“The only mention of climate change in the budget is a paltry $12m to maybe talk about doing something in the future. But we know climate change needs urgent action right now.”
She said $400,000 allocated towards a renewable energy project in the marginal seat of Macedon was not enough, and a $1.9m budget allocation towards clean coal projects indicated the government believed the state’s energy future was in dirty coal.
