10.06.2023State and Federal Budget 2023-24: insights, spend and benefits to the community

State Budget 2023-24

Treasurer of Victoria, Tim Pallas delivered the Victorian Government Budget 2023-24 on 23 May, with a range of new and increased taxes and levies announced. The Budget highlighted that State debt is set to substantially increase at a time when critical decisions are made around spending on things like major Victorian infrastructure projects, the public service, health and costs of living.

Committee for Melbourne considers that a close watch is needed on the productivity outcomes from spending, as well as the impact of new and increased taxes and levies on business and economic outcomes. Victoria’s competitiveness with other states as a place to live, invest and do business, must be a consideration.

The Committee has strongly advocated for a Melbourne Airport Rail, and it is disappointing that the Melbourne Airport Rail project is being delayed in response to the Federal Government review – due by August. This project, which has been in the pipeline for a long time, has a clear productivity benefit and business case including significant benefits of opening the west, integrating the transport connections and ensuring Melbourne is a globally recognised and efficient airport.

We ask the Federal and Victorian Governments to be transparent about all the projects that have been assessed, how many are likely to be delayed and a clear indication of the pipeline for all infrastructure projects, including the Suburban Rail Loop. Indeed, investment in comprehensive bus reform and transport pricing and technologies must also be considered. While we are pleased to see allocation of a small spend towards bus reform, the Committee has been calling for reform that delivers more frequent, direct, green and low-cost bus services to enhance liveability and equity across the city. To deliver a step change that provides genuine transport choice for the community, then more spend may be required.

Understanding the assessments that have been made and how an integrated transport plan might be achieved is essential so that all Victorians can be confident about where their taxpayers’ dollars are being spent.

The Committee’s pre-budget submission called on the Victorian Government to review all major infrastructure projects to determine the most appropriate ones to proceed with, based on productivity, connectivity and timeliness assessments.

Read our state pre-budget submission.

Federal Budget 2023-24

The Albanese Government delivered its first full-year budget on Tuesday 9 May.

As anticipated, the government targeted cost of living relief for Australians grappling with inflation pressures and rising interest rates. Major spending increases will be directed towards Medicare, JobSeeker, Commonwealth Rental Assistance and Parenting Payment recipients. Energy bill relief will flow to low-income earners. Significant funds were also directed towards national defence and the energy transition.

The government took steps to limit spending, help curb inflation and is on track to deliver a $4.2 billion surplus – the first in 15 years.

For Melbourne though, it is a mixed result. The city will benefit through ambitious action on the energy transition, but the commitments on housing affordability and infrastructure funding was missing, with commitments such as Melbourne Airport Rail coming under review. Many of the recommendations made by the Committee towards the Federal Budget were not satisfied.

Read our federal pre-budget submission.

Read federal budget articles by some of our members: PwC, Deloitte, EY