DELIVERING FOR ALL VICTORIANSVICTORIAN BUDGET 19/20

TIM PALLAS MPTREASURER OF VICTORIA

31 MAY 2019

VICTORIA’S CONTRIBUTION TO NATIONAL GROWTH, SELECTED INDICATORS

VICTORIA’S ECONOMY IS POWERING THE NATION

Source: Australian Bureau of Statistics

1

0

10

20

30

40

50

GSP/GDP Public demand Employment Full-time employment

per c

ent

1990-91 to 2013-14 2014-15 to 2017-18

Victoria's share of Australian GDP, 2017-18

PRIVATE AND PUBLIC INVESTMENT CONTRIBUTION TO VICTORIA'S REAL GSP GROWTH

INVESTMENT IS BOOSTING GROWTH

2

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18

Perc

enta

ge p

oint

Average 0.9ppt

Average 0.1ppt

Source: Australian Bureau of Statistics. Note: Excludes dwelling investment

CUMULATIVE VICTORIAN EMPLOYMENT GROWTH SINCE NOVEMBER 2014

MORE THAN 450 000 JOBS CREATED SINCE 2014

Source: Australian Bureau of Statistics

3

0

100

200

300

400

500

Nov-2014 Nov-2015 Nov-2016 Nov-2017 Nov-2018

Empl

oym

ent (

'000

)

EMPLOYMENT GROWTH BY INDUSTRY, 2013-14 TO 2017-18

-20 0 20 40 60 80

Wholesale TradeMining

UtilitiesFinancial

ICTAdministrative services

ManufacturingAgricultureReal estate

Public administrationArts

Other servicesTransportEducation

Retail TradeProfessional and technical services

HospitalityHealth

Construction

persons '000

GROWING JOBS ACROSS INDUSTRIES

4Source: Australian Bureau of Statistics

VICTORIA’S PARTICIPATION RATE, TREND

MORE PEOPLE ARE ENTERING THE LABOUR FORCE

5

62.0

63.0

64.0

65.0

66.0

67.0

1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019

Per c

ent

Victoria AustraliaSource: Australian Bureau of Statistics

FORECASTS OF VICTORIA’S REAL GSP AND REAL GSP PER CAPITA

BOOSTING LIVING STANDARDS FOR VICTORIANS

Sources: Australian Bureau of Statistics; Department of Treasury and Finance

-1.5

0.0

1.5

3.0

4.5

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

per c

ent

Real GSP per capita growth Real GSP growth

6

GOVERNMENT INFRASTRUCTURE INVESTMENT

RECORD LEVELS OF INFRASTRUCTURE INVESTMENT

Source: Department of Treasury and Finance

7

Average GII, 2005-06 to 2014-15, $4.9 billion

Average GII, 2015-16 to 2018-19, $9.6 billion

Average GII, 2015-16 to 2018-19, $13.4 billion

0

2

4

6

8

10

12

14

16

18

2005-06 2007-08 2009-10 2011-12 2013-14 2015-16 2017-18 2019-20 2021-22

$ bi

llion

OPERATING RESULT AND NET DEBT

STRONG FINANCIAL MANAGEMENT

Source: Department of Treasury and Finance

8

1.2

2.7 2.7 2.31.1 1.0 1.5

3.94.9

6.0 5.83.8 4.6

5.1

5.1

8.3

9.5 9.8 10.0

0

2

4

6

8

10

12

0

1

2

3

4

5

6

2014-15 2016-17 2018-19 2020-21 2022-23

per c

ent o

f GSP

$ bi

llion

Operating result (LHS) Historical net debt to GSP (RHS) Projected net debt to GSP (RHS)

Budget and forward estimates

INFRASTRUCTURE SHARE VS POPULATION SHARE (COMPARABLE STATES) FIVE YEARS TO 2022-23

0

5

10

15

20

25

30

35

NSW VIC QLD WA SA

Population Share Infrastructure Share

VICTORIA IS MISSING OUT ON A FAIR SHARE

Sources: 2019-20 Commonwealth Budget; Department of Treasury and Finance.

9

This year’s Budget provides $348 million in tax relief, including:

> $173 million to cut the regional employer rate of payroll tax from 50 per cent to 25 per cent of the metropolitan rate by 2022-23

> $87 million to lift the payroll tax-free threshold to $700 000 by 2022-23

> $69 million to provide a 50 per cent discount on stamp duty for commercial and industrial properties transactions in regional Victoria by 2022-23

> $7 million for expanding the payroll tax exemption to all types of parental leave

CREATING JOBS AND WORKING WITH BUSINESS

10

$246 million

$745 million

$348 million

0

500

1,000

$ m

illio

n

2011-12 to 2014-152015-16 to 2018-192019-20 Budget

TOTAL BUSINESS TAX CUTS

TAXATION AND ROYALTY REVENUE PER CAPITA

VICTORIA’S TAX SETTINGS REMAIN HIGHLY COMPETITIVE

Sources: Department of Treasury and Finance, Interstate Budget and Budget Update 11

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2007

-08

2008

-09

2009

-10

2010

-11

2011

-12

2012

-13

2013

-14

2014

-15

2015

-16

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

NSW

VIC

QLD

SA

WA

TAS

NT

ACT

DELIVERING BETTER SERVICES

12

The 2019/20 Budget includes $11.4 billion in output commitments:> $882 million to kickstart the rollout of three-year-old kinder for every Victorian child

> $545 million to expand Solar Homes, as part of a $1.3 billion investment over 10 years, to reach 770 000 homes

> $322 million to begin the rollout of free dental for students at our government schools

> $235 million for court improvements across Victoria, including the redevelopment of Bendigo's law courts

> $218 million to make our schools more inclusive, with more funding to support children with disability and additional needs

> $185 million to continue implementing the Royal Commission’s recommendations

> $173 million to make sure more Victorians get the help they need

> $109 million to support Aboriginal Victorians

> $58 million to expand our School Breakfast Clubs and make sure more Victorian kids are learning on a full stomach

INFRASTRUCTURE VICTORIANS NEED

13

The 2019/20 Budget includes a number of capital commitments:

> $15.8 billion to fully fund and make North East Link a reality

> $6.6 billion to remove another 25 of our most dangerous and congested level crossings, with 75 crossings gone for good by 2025

> $3.4 billion to transform the suburban train network, delivering a massive upgrade to the Sunbury Line, duplicating the Cranbourne Line and Stage Two of the Hurstbridge Line

> $1.8 billion to increase capacity across the Victorian prison system

> $1.8 billion to keep building, upgrading and modernising schools across Victoria

> $1.5 billion total investment for the new Footscray Hospital

> $209 million to build 1 000 new public housing properties across our state

INVESTING IN EVERY CORNER OF THE STATE

14

DELIVERING FOR ALL VICTORIANSVICTORIAN BUDGET 19/20

TIM PALLAS MPTREASURER OF VICTORIA

31 MAY 2019