The Victorian government has announced its election year budget, emphasising its focus on infrastructure with a record $13.7 billion infrastructure pledge.
Booming population and jobs growth is fuelling significant infrastructure spending in the Victorian budget, which is expected to deliver a $1.4 billion surplus next financial year.
To keep up with its population growth and the pace of development, the Victorian government has also announced $9.7 million to process a greater number of planning permits and $3.5 million to support councils with speedier subdivision approvals.
The Andrews government has also pledged $50 million to community infrastructure projects in Melbourne’s growth corridors, for developments such as parks, swimming pools and community centres.
The budget will increase government’s spending on employees including engineers, construction workers, apprentices, nurses and teachers by 11 per cent in the 2018/19 financial year.
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Property cool down to ease stamp duty takings
Stamp duty is the largest contributor to the state’s tax revenue and the Victorian treasury anticipates a slowdown in the property market, and consequently a drop in stamp duty revenue.
Stamp duty is expected to rise 3.8 per cent to $7.1 billion in the coming 2018-19 financial year. In comparison, stamp duty grew by 11 per cent in 2017-18.
“Price and volume growth in the property markets on the east coast are likely to slow in 2018,” the state budget says.
“There is some evidence from auction clearance rates, residential building approvals and housing finance that the cycle in the housing market has started to moderate,” the budget reported.
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However the contribution from commercial property increased between July and December last year from 14.3 per cent to 24.3 per cent.
“Low vacancy rates for office space in Melbourne, strong growth in rental income and building approvals suggest commercial duties may remain high in the near term,” the report says.
New guidelines for the exteriors of Melbourne’s apartment towers will be developed by government with the aim of ensuring the quality and standard of new building finishes.
Planning Minister Richard Wynne said government would make sure apartments were “built to a high standard and no corners are cut.”
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Government will provide $4 million to complete planning at Fishermans Bend for schools, public transport.
Victoria’s economy has grown by $48 billion in the past three-and-a- half years, Treasurer Tim Pallas said ahead of the budget.
“We have the strongest economy in the nation, we have the strongest job growth in the nation,” Pallas said.
Social housing was one of the budget losers with no new money announced to tackle housing affordability, or pledged towards new social housing.