Victorian Treasurer Tim Pallas handed down the State Budget on 7 May. As expected, it is fiscally austere, with significantly reduced spending, including delayed infrastructure spending. Notably, there are no big-ticket items.
According to the Victorian State Government, this budget “focuses on education and healthcare”.
With an automotive retail lens, VACC can report there are no new automotive-specific levies, which is a win for the industry. This will also be the eighth consecutive year the Victorian State Government has resisted raising motor vehicle duty on the sale of new and used motor vehicles. However, anything is possible over the forward estimates as the industry prepares for a bleaker retail landscape.
Notably, there is no listed industry support for EV transition at a state level, nor additional funding allocated to the Victorian Civil and Administrative Tribunal (VCAT) to address major backlogs. This is a missed opportunity and will probably cost taxpayers, consumers, and the automotive industry valuable time and resources.
Key announcements made in the Victorian State Budget.
- Forecasted revenue from motor vehicle taxes is $3.6 billion in 2024-25 then grow by an average of 5.4 per cent a year over the forward estimates. In 2024-25, motor vehicle duty revenue growth should slow following the clearance of backlogged vehicle orders that had accumulated because of supply-chain disruptions caused by the COVID-19 pandemic. Growth should return to pre-pandemic rates over the forward estimates.
- The Victorian Government will conclude the Sick Pay Guarantee (casual worker sick pay trial).
- Waste and fire services levies will increase.
- $11.4 million to continue support for apprentices, trainees, and their employers to meet Victoria’s workforce priorities. This includes Apprenticeships Victoria and the Apprenticeship Support Officer program.
- Investing $555 million in skills and TAFE colleges. $394 million to boost vocational training and Free TAFE access. $32 million for the Skills First Skill Set initiative to provide training subsidies to address workforce shortages.
- The government will gradually abolish business insurance duty over 10 years, starting on 1 July 2024.
- The government will lift the payroll tax-free threshold from $700,000 to $900,000 (from 1 July 2024), and then to $1 million (from 1 July 2025). Phasing out the payroll tax-free threshold for larger businesses.
- The government will implement a gradual elimination of stamp duty on commercial and industrial properties and replace it with the Commercial and Industrial Property Tax.
- $18 million to continue planning for offshore wind generation and $17 million to plan and design a renewable energy terminal at the Port of Hastings as part of the government’s commitment to achieve at least two gigawatts of offshore wind capacity by 2032. The government will provide funding of $12 million to VicGrid to coordinate the state’s transmission infrastructure for renewable energy projects, and $10 million will improve spatial risk mapping and guidance for future renewable energy projects.
- Provide $14.8 million to support circular economy policy functions within the Department of Energy, Environment and Climate Action to continue improving Victoria’s waste and recycling system and help achieve the government’s ambitious circular economy targets. This includes funding to realise the benefits of previous investments in Victoria’s waste data systems and infrastructure. The Sustainability Fund will partially fund this initiative.