Victoria Budget 2020: Forecast deficit more than $23 billion

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Victoria’s COVID-19 pandemic and last summer’s devastating bushfires have struck a severe blow to the state’s economy, with a deficit of $23.3 billion forecast in the 2020-21 State Budget.

Treasurer Tim Pallas today announced the state recorded an operating deficit of $6.5 billion in the year 2019-20, which will blow out to a projected $23.3 billion deficit in the 2020-21 financial year.

The state government’s net debt is also forecast to rise to $154.8 billion by the year 2023-24, with net debt in the 2020-21 year at a colossal $86.7 billion.

Total revenue in 2020-21 is expected to be 4.2 per cent lower than in the year 2018-19.

Despite the startling figures, primarily triggered by the pummelling effects of COVID-19, the Victorian Government hammered home the message the Budget was aimed at creating jobs and reviving the economy as part of a long road to recovery.

The state’s Jobs for Victoria initiative will be the crux of its economic recovery plan, with $619 million injected into the scheme to assist hundreds and thousands of Victorians looking for work.

The Victorian Government hopes the package will create 400,000 new jobs by 2025.

The cash injection includes $250 million to support businesses to hire at least 10,000 Victorians through a six-month wage subsidy.

The positions would be for Victorians who have been hardest hit by the pandemic, including young people, retrenched workers and people who have been long-term unemployed.

The sectors hardest-hit by COVID-19 including hospitality, tourism, accommodation, creative industries and retail will also be supported through $2.6 billion in grants part of the Business Support Fund.

A mega $2.9 billion has also been set aside for the state’s COVID-19 response.

Who are the winners of the 2020 budget?

SCHOOLS, TEACHERS AND STUDENTS

More than $3 billion has been invested in school upgrades, including $1.1 billion as part of a Building Works Package and a further $1.9 billion to upgrade 162 schools and build one new school.

More than $388.8 million will go towards improving facilities at 39 specialist schools, making it Victoria’s single largest investment ever in upgrading specialist schools.

Another $85 million will expand seven existing schools and $250 million will go towards employing tutors in every government school and every non-government school that needs them.

A major $1.6 billion will also be invested in transforming how students are supported with a disability.

PARENTS AND CHILDREN IN EARLY LEARNING

Kindergarten will be free in Victoria next year under a $169.6 million funding boost, part of a $774 million investment in early childhood education.

The free tuition is set to save around 100,000 families about $2000 for every child enrolled in a funded kindergarten program.

A major $81.6 million will also be invested into a “massive expansion” of before and after school care, which will see an increase in the availability of programs.

Grants of up to $75,000 will also be made available to start new school care programs at up to 400 government schools.

CASUAL AND INSECURE WORKERS

Casual and insecure workers will get access to paid sick and carer’s leave as part of a two-year pilot scheme.

The new Secure Work Pilot Scheme will provide up to five days of sick and carer’s pay at the national minimum wage for casual and insecure workers in priority industries.

The scheme is set to launch at the end of next year or early 2022.

HOMESEEKERS AND HOMEBUYERS

The government will invest $6 billion as part of Victoria’s Big Housing Build to construct more than 12,000 new social and affordable homes and make housing more accessible for Victorians.

Eligible Victorian homebuyers will also nab a half-price stamp duty discount in a bid to reignite the state’s property market.

New residential builds valued under $1 million will receive a 50 per cent waiver on stamp duty up to $27,500 until June 30, 2021, the State Budget revealed.

Buyers will also be able to claim a 25 per cent saving of up to $13,750 on existing residential properties over the same period.

A 50 per cent land tax discount will also be introduced from 2022 to kickstart interest for the build-to-rent sector.

HEALTHCARE WORKERS AND PATIENTS

A major $2 billion will be splashed on building new hospitals and upgrading existing ones to enhance the state’s healthcare system.

A $2.8 billion funding boost will also ensure the state’s health system maintains capacity as hospitals move to COVID Normal.

While $869 million will be invested in mental health initiatives, including more acute mental health beds.

HOLIDAYMAKERS AND TOURISM SECTOR

The Victorian Government will offer up to 120,000 travel vouchers worth $200 each to drive tourism back to regional areas.

The travel initiative, worth $28 million, will require voucher applicants to spend at least $400 on accommodation, attractions or tours in regional Victoria to qualify.

BUSINESSES AND UNEMPLOYED WORKERS

A $619 million Jobs for Victoria initiative will assist hundreds of thousands of Victorians looking for work, including $250 million to support businesses to hire at least 10,000 Victorians through a six-month wage subsidy.

Meanwhile, $836 million will go towards new jobs tax credits to re-hire staff, restore hours and create new jobs.

There is also set to be a $1.7 billion cash flow boost for businesses through the deferral of 2020-21 payroll tax liabilities for payrolls up to $10 million.

The hardest-hit sectors including hospitality, tourism, accommodation, creative industries and retail will be supported through $2.6 billion in grants part of the Business Support Fund.

Small and medium-sized businesses have also scored a major win, with $1.1 billion in grants.

Source: 9News

 

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