26.11.2020Billions spent to reinvigorate economy and help those in need
Victorian Budget 2020-21
There is a lot to like about this budget.
Significant investment in Victoria’s health system, social and affordable housing, transport, education facilities and renewable energy should help create a fairer, healthier, more efficient and cleaner state.
It was important that the Government took advantage of low interest rates to fund Victoria’s economic recovery and to take that opportunity to spend in important areas of community wellbeing and support. This budget aims to cater for those that need assistance as well as to facilitate hundreds of thousands of individuals to join, or return to, the workforce whilst also providing some much-needed stimulus for an economy battered by the pandemic.
However, Committee for Melbourne (the Committee) considers that there are opportunities for Melbourne’s future that need further consideration and policy direction beyond this budget.
- The $6 billion commitment to social and affordable housing is a good first step, but more work is needed to scale up investment in social and affordable housing.
- Transport infrastructure investment must be incorporated into a long-term, integrated plan, that provides the vision and certainty for how Melbourne will be developed and grow. This ensures that major projects deliver for Melbourne’s future and that important projects are not overlooked (such as a transport solution for Fishermans Bend).
- While recognising the importance of regional tourism, the Committee would welcome greater support for Greater Melbourne and the CBD’s visitor economy.
- The significant commitment to arts & culture (including events) spending in this budget is a welcome first step, however, greater support for Melbourne’s arts industries should include government procurement policies that mandate the use of Melbourne or Victorian-based creative industries on government projects.
- The absence of a focus specifically on Artificial Intelligence initiatives in this budget provides opportunities to consider greater focus going forward, including reconvening the Victorian All-Party Parliamentary Group on AI (VAPPGAI).
The Committee has identified key bold projects to revitalise Melbourne that also warrant significant investment and commitment. Projects like transport connectivity to Fishermans Bend, revitalising the Yarra’s commuter services and planning for Melbourne as a major investment destination, are essential to Melbourne’s long-term future success.
The Committee will continue to advocate for city shaping initiatives that will benefit Melbourne’s future.
The Committee’s assessment of the budget initiatives:
Social and affordable housing investment – a good first step, but needs to go further
A feature of the budget is the Big Housing Build, with $6 billion to be injected into the construction of around 12,000 social and affordable homes.
The Committee welcomes the announcement as a good first step. The Committee has been calling for greater investment in social and affordable housing to accommodate vulnerable individuals and key workers.
However, we must be mindful that more needs to be done. Victoria has neglected social and affordable housing for decades. There is already a huge shortfall in supply, and wage reductions and job losses resulting from the pandemic will likely fuel demand even further.
The Committee proposes that streamlining and amending taxation and planning policies could help facilitate greater private sector investment in social and affordable housing and the increase of the supply of this asset class.
Major transport infrastructure requires more integrated planning
Investment in transport infrastructure is a priority for the Victorian Government as it looks to make commuting more efficient while also providing economic stimulus.
While the Committee welcomes many transport-related measures in this budget the right investments are needed. Clarity around how those investments will deliver into the future assists in decision-making for those major projects.
Three major projects – Suburban Rail Loop (SRL), Melbourne Airport Rail Link (MARL) and Geelong Fast Rail – have been backed with significant investment dollars, yet not one has a completed business case.
- We still do not know how much the SRL will cost or whether alternative options are preferable, despite the $2.2 billion committed in this Budget.
- The Committee welcomes the announcement of a MARL, proposed to commence in 2022. However, given Melbourne’s recent and forecast population growth, particularly in the West –the Committee questions whether commuters will get the efficient and spacious service from a MARL that connects with the Metro Tunnel. The Committee has long advocated for a MARL that offers a maximum 20-minute service between Melbourne Airport and the CBD, with Sunshine its sole stop. A tunnel between Sunshine and the CBD would allow dedicated airport trains and tracks; enabling improved services for the fast-growing west and regions.
More than ever, Melbourne requires a comprehensive plan to guide its growth. A clear and comprehensive plan detailing how the city will grow will provide clarity around what transport infrastructure projects are required and when they would be delivered.
Having a plan would help ensure that each major transport infrastructure project is supported by a robust, independently verified business case, which confirms its benefits outweigh the costs.
It would also ensure that major projects, such as a transport connection to Fishermans Bend, would help create investment certainty around that precinct’s development. The absence of commitments in this budget to a transport solution for Fishermans Bend further delays the economic benefits that Melbourne will reap once the precinct is developed.
Earlier this year, the Committee released Transporting Melbourne, which calls on the Victorian Government to design and publish a comprehensive, integrated transport plan which considers land-use and economic development planning.
Increased support for Greater Melbourne’s tourism industry required
The Budget includes a $465 million Victorian Tourism Recovery Package. This package includes the delivery of up to 120,000 vouchers valued at $200 each to people to encourage them to visit and stay in regional Victoria.
Having formed the Visitor Economy Reference Group, featuring diverse visitor economy representatives committed to helping rebuild the sector, the Committee welcomes the government’s support of the local tourism industry.
Support for Victoria’s regions is important as they have been hit particularly hard by the recent bushfires and COVID-19. However, given the interdependence between Greater Melbourne and the regions, and that Melbourne is a gateway to the regions, the development of a tourism strategy that includes promotion of the visitor economy in Greater Melbourne makes good sense.
A reciprocal voucher program encouraging Victorians to visit and spend in Melbourne could have been implemented. This presents a lost opportunity to reinvigorate Greater Melbourne’s visitor economy.
The Committee will continue to liaise with the government through the VERG, to determine a road to recovery strategy that will encompass a connected plan for Greater Melbourne (including the CBD).
The Committee’s VERG will be releasing a suite of short and medium-term recommendations in mid-December for the government’s consideration.
Support for Melbourne and Victorian-based creative industries a necessity
Melbourne is well known for its arts and culture, events and liveability – all of which have been buffeted by the pandemic. Significant investments in the arts and culture sector, including the $1.4 billion transformation of Melbourne’s Arts Precinct and funding to attract more events, are welcome first steps towards revitalising struggling sectors.
During the course of the pandemic, the Committee’s Arts & Culture Taskforce has been liaising with the government and various agencies to develop ideas for the recovery of the sector.
In the past few years, branding, design and architectural work for some of Melbourne’s major cultural institutions has been awarded to oversees-based firms.
The Committee’s Arts and Culture Taskforce has recommended a suite of measures to support Melbourne’s arts & culture sector recovery, including that government procurement policies should mandate the use of Melbourne or Victorian-based creative industries for all government projects (but at the very least for creative industries projects).
A greater focus specifically on Artificial Intelligence (AI) to support future economic growth
The Committee notes that the Budget’s innovation agenda did not appear to have a significant focus specifically on Artificial Intelligence (AI).
Victoria should aspire to be at the forefront of the development, adoption and deployment of AI. Melbourne’s economic prosperity hinges on the continued success of key sectors including healthcare, advanced manufacturing, education, creative industries and the experience economy – all of which can be underpinned by effective use of AI.
The Committee’s AI Taskforce will release a report in mid-December identifying key stakeholder collaboration mechanisms and governance frameworks that can drive the adoption and deployment of AI- including the reconvening on VAPPGAI to begin the collaboration and education on this essential topic.
Read the brief here