On Monday 27th May 2019, the Victorian Treasurer, the Hon. Tim Pallas, released the 2019/20 State Budget with the premise of “Delivering for all Victorians”.

The release of the 2019 May State Budget was deferred until Monday, 27 May 2019, following the recent Federal Election.  With this year’s budget, the State Government are committed to delivering a massive $27.4 billion “Suburban Transport Blitz” to radically reshape our suburbs and change the way people get around.

CCF Victoria – CEO, John Kilgour, was again at the State Budget “lock up” and provided the following summary of key announcements made that will impact on the civil construction industry over the next 4 year forward estimate period.

1. Key Financial Indicators

The Victorian State Budget 2019/20 builds on the State’s strong economic growth, with Victoria outperforming the nation across a broad range of indicators.  The State is in a strong financial position, with an operating surplus of $1.0bn in 2019/20 and then surpluses averaging $3.4bn per annum in the forward estimates.  Other key financial indicators include:

  • The State Economy grew 3.5% in 2018/19 outstripping Australia’s national economic growth of 2.8%;
  • The State’s un-employment rate as at March 2019 quarter fell to 4.6%;
  • Ave $13.4bn per annum of major infrastructure investment over the forward estimates;
  • Real GSP increased by 3.5% and forecast to average in excess of 2.75% in the forward estimates;
  • Over the last 4-year period, we have seen a growth in the Victorian economy of $455bn and 450,000 new jobs created over the last 4 years;
  • The State will retain its’ triple A (AAA) credit rating
  • Net Debt is stabilised at 12% of GSP
  • Stamp Duty “write downs” of $5.2bn

2. Roads/Rail & Transport

  • A further $15.8 bn will fully fund the delivery of the North East Link;
  • $6.6bn to remove another 25 levels crossings bring the total to 75 removed by 2025 (refer attached summary of the additional crossings to be removed);
  • $3.4bn investment to transform the suburban train network including Sunbury, Cranbourne and Pakenham lines and an investment of $547m to deliver the next stage of the Hurstbridge line upgrade duplication 4.5kms of track and better stations at Greensborough and Montmorency;
  • $615m into public transport (includes $340m for 18 new VLocity trains for regional rail);
  • $608m to fix local roads including $22.6m to fix some of the busiest and most congested intersections. These funds will also cover planning and pre-construction on intersection upgrades along South Road in Moorabbin and Western Port Highway;
  • $425m investment for maintenance of regional roads;
  • The budget also delivers $100m towards the Western Rail Plan – the first step in dully separating regional and metropolitan services on the Geelong and Ballarat lines;
  • $300m has also been set aside for planning, technical investigations and development of the Suburban Rail Loop;
  • $163m for new and upgraded trams;
  • $60.8m to unlocking Mair & Sturt Streets in Ballarat;
  • $45.4m to improve bike and foot paths with $27.3m targeted to upgrade St Kilda Road;
Additional Level Crossings Update

3. Land Development (Extractive Materials, Renewable Energy, VEDN, Water)

  • $10m over the forward estimates to fund a strategic extractive resource areas for quarries (pre-planning)
  • $1.3bn is allocated to roll out the Solar Homes package with rebates available for solar panels, hot water systems, batteries and zero interest loans so Victorian Households can install half price power with no up-front costs;
  • Criminal penalties are being increased to $1m for energy retailers who mis-lead or deceive customers;
  • Funding for Capital Works programs covering the 19 Water Authorities are summarised below in the Budget Papers:
Water Authorities – Estimates Investment & Estimated Spend

4. Regional Communities

  • $2.6bn to deliver the Regional & Rural Victoria Program supporting the infrastructure and jobs in these communities; 
  • $671m to build 17 new schools (and land for four more) as part of the Government’s commitment to open 100 across the state over the next 8 years;
  • $142.5m to boost Victoria’s bio-security system in the agriculture sector;
  • $131.8m into regional communities including free carparks in Ballarat and the Latrobe Valley;

5. Skills Development & Training

  • $180m for TAFE and training including $57m to upgrade and build TAFE facilities and campuses;
  • $4.7m for training places a TAFE’s Learn Locals, and private training organisations;
  • $4.7m allocated to invest in Apprenticeship Support Officers;
  • $23.5m at the Gordon Geelong (Culinary School);
  • $20m allocate for library and leaning Hub at Go TAFE Warrnambool;
  • $10.2m for an Integrated Centre for Sustainable Construction Technologies which will be established at Box Hill, while Melbourne Polytechnic and Chisolm Institute will share $500k to design and plan upgrades to their Collingwood and Frankston capuses respectively;


At the budget “lock up” the Premier, the Hon Daniel Andrews, addressed the group and stated that a key objective following the State Election in November 2018 was to “hit the ground running” with a “fast start” to the new 4-year term.
His key messages delivered included:

  • “Restoration of TAFE” and within 4 years we are now offering Free TAFE courses
  • The downturn in the property market has impacted on State Revenues through a reduction in Stamp Duty income but there is a belief that this has now “bottomed out.”
  • This is a surplus budget with a State Revenue write down of approximately $5bn.
  • The “Suburban Transport Blitz” is an investment in growing and maintaining our existing network.
  • $6.6bn to deliver the next 25 level crossing removals
  • Local Road projects committed at the election will be fully committed
  • $2.6bn in new trains
  • $1bn in new roads
  • Fully funded health program for 500,000 extra appointments and occasions covering medical services into regional Victoria
  • Commencing “free dental” into schools
  • $540m solar initiative into homes

“In challenging times, we have delivered on our promises and delivered the things we said we would do. A challenging budget … in challenging times”.

“Creating momentum – wealth and opportunity and re-investing … stronger and fairer … a budget that delivers for all Victorians.”

Other key announcements of interest to CCF members made in the Budget include:

  • $173m investment towards mental health;
  • $348m in tax relief for small business with regional payroll tax-free threshold to be increased by $50k to $700k by 2022/23
  • Regional Payroll Tax rate will be cut to 25% of the metropolitan rate by 2022/23;
  • 50% discount on land transfer duty of commercial and industrial properties in Regional Victoria by 2023/24;
  • Foreign purchaser duty surcharge on properties bought in Victoria will rise from 7% to 8% from 1 July 2019;
  • From 1 January 2020, foreign property owners will also pay more on their land tax with an absentee owner surcharge increasing from 1.5% to 2% for about 3,000 property owners;
  • Budget increases surcharge on luxury passenger worth more than $100k;

For more information on this subject, contact me on 1300 DIAl CCF.

John Kilgour
CEO, Civil Contractors Federation Victoria