2025–26 Victorian State Budget | Key Highlights

20 May

Disclaimer: This is a small summary created from the official Victorian State Budget for our Strategem client’s ease and accessibility. For a full comprehensive look at the Victorian State Budget, please refer to www.budget.vic.gov.au or www.dtf.vic.gov.au/2025-26-state-budget

Overview

On 20 May 2025, the Victorian Government handed down the 2025–26 State Budget, outlining its plan to address cost-of-living pressures, support essential services, and manage the state’s finances responsibly.

The Budget states that it aims to balance targeted household and business support with ongoing investment in critical areas such as health, education, housing, infrastructure and clean energy — all while working towards returning the state’s finances to surplus.

With a total of $8.1 billion in new capital investment and $2.3 billion in cost-of-living relief, the Budget outlines key priorities for the year ahead and provides updated forecasts for revenue, expenditure, and debt reduction.

This blog provides a snapshot of the Budget’s key highlights, including which sectors are receiving funding and what these measures mean for our clients and wider Victorians.

Budget Priorities

Whether you're a client of Strategem or part of the wider community, this guide is designed to help you better understand how the Victorian 2025/26 Budget impacts your world.

Key Budget Initiatives at a Glance

✔ Economic and Fiscal Overview

The net result from transactions for the general government sector is forecast to be a surplus of $0.6 billion in 2025–26, with further surpluses of $1.9 billion in 2026–27 and $2.4 billion in 2027–28.
Net cash flows from operating activities are forecast to be $6.2 billion in 2025–26, and remain in surplus across all forward years.
Net debt is expected to be $155.5 billion at June 2025, increasing to $194.0 billion by June 2029, though as a percentage of GSP it is forecast to reduce to 24.9% by 2028–29.
The total general government sector revenue is expected to be $108.3 billion in 2025–26, with expenditure at $107.7 billion.

✔ Business and Industry

The 2025–26 Victorian State Budget delivers a substantial investment into business growth, export support, innovation, and regulatory reform—supporting businesses across all sectors to grow, employ and compete globally.
$240 million is allocated to deliver the full Economic Growth Statement, a comprehensive package designed to enhance business competitiveness and modernise key sectors.
$150 million is committed to the Victorian Investment Fund, offering concessional loans and equity support to high-growth, high-impact businesses across strategic sectors like manufacturing, clean energy and health tech.
$35 million will help small and medium-sized exporters diversify their customer base and break into new international markets through tailored facilitation services and government-led trade missions.
$26.7 million supports digital capability building through the Digital Jobs Program and business process upgrades via AI tools and digitised licensing systems.
$11.4 million is allocated for up to 1,000 small business owners to receive one-on-one mentoring across Victoria’s priority sectors.
$10 million will streamline local regulatory processes in regional areas, especially for logistics, food production and other regionally significant industries.
$10 million funds five new Regional Launching Pads to provide shared spaces for entrepreneurs, start-ups and local investors to collaborate and grow.
$9.4 million expands Victoria’s global trade and investment network, boosting our ability to attract inbound investment and support local businesses to scale offshore.
$9.3 million under the Yes to International Students Fund strengthens global partnerships for TAFEs and universities to grow international education.
$6.7 million strengthens resource regulation and cuts delays in approvals for mining and quarrying operations, including critical minerals.
$5 million goes to the Victorian Industry Development Fund to co-invest with commercial lenders in scaling start-ups and innovative businesses.
$4.4 million aims to halve the number of business regulators in Victoria by 2030, reducing complexity and simplifying compliance for businesses.
$3.5 million is set to reduce the overall regulatory burden, with a $500 million reduction target to be achieved through process reform and digital transformation.
$2.5 million will create new Priority Assessment Teams to fast-track major commercial and infrastructure project approvals.
$2.2 million supports Aboriginal business growth, including hosting the World Indigenous Business Forum and funding for Kinaway and Ngarrimili to help Indigenous businesses scale locally and globally.
$2 million establishes an Investment Coordinator-General to ensure that large-scale projects are progressed efficiently through cross-government oversight.
$1.5 million launches a Renewable Gas Guarantee to secure future supply for industrial businesses unable to transition to full electrification.
$1.2 million will help Victorian SMEs win defence contracts by lifting capability, expanding industry networks, and improving workforce readiness.

✔ Health & Mental Health

Total investment of $11.1 billion in the health system.
$634 million to open and operationalise nine new or redeveloped hospitals.
$171 million for hospital infrastructure, including engineering upgrades, medical equipment, and essential works at Royal Melbourne Hospital.
$497 million to improve mental health services.
$167 million to reduce ambulance waiting times.
$203 million for workforce initiatives, including student placements and training programs.
$96 million for access to the National Blood Agreement and specialised therapies.
$52 million for aged care support, including aids and equipment.
$34 million for public health unit services.
$22 million to continue early parenting centres across multiple regional sites.

$309 million to operationalise new mental health beds.
$126 million for children and youth-focused programs.
$23 million to expand the Mental Health and Wellbeing Locals service network.
$10 million for capital and facility improvements in mental health and alcohol and other drug services.

✔ Education and Early Childhood

Total investment of $4.9 billion in education.
$2 billion to continue the Best Start, Best Life reforms, including Free Kinder and Pre-Prep.
$1.5 billion for new schools, land acquisition, upgrades and maintenance.
$322 million in school upgrade works.
$320 million for the Disability Inclusion rollout.
$149 million to support access and inclusion across schools and early childhood settings.
$133 million for literacy and numeracy initiatives, including universal phonics and small group tutoring.
$237 million to acquire land for future school sites.

✔ TAFE, Training and Workforce Development

$459 million in skills and TAFE investment.
$171 million to subsidise TAFE and training courses and support 20,000 additional Free TAFE places.
$44 million for 9,600 student places in digital literacy and at least 8,000 places in literacy and numeracy programs.
$23 million for apprenticeship system enhancements.
$12.6 million to develop a Future of Housing Construction TAFE Centre of Excellence.
$1 million for the Boosting Business Skills Mentoring program to provide mentoring to 1,000 small businesses.

✔ Transport and Infrastructure

$8.1 billion total estimated investment (TEI) in targeted infrastructure.
$727 million to operationalise the Metro Tunnel.
$4.1 billion for the Sunshine Station Transport Superhub.
$1.2 billion to maintain and improve public transport, including bus services and new train capacity.
$1.2 billion Road Blitz, including intersection and road upgrades across Donnybrook, Carrum, Altona Meadows and Werribee Main Road.
$412 million for road safety actions.

✔ Housing and Homelessness

$407 million to unlock land and support housing growth.
$24 million for technical planning to expand the Activity Centre Program.
$12 million to implement the Greenfields Plan.
$249 million for enabling infrastructure in partnership with the Commonwealth Government.
$61 million to address homelessness and provide housing support services.
Extension of the temporary land transfer duty concession for off-the-plan properties until October 2026.

✔ Cost of Living Support

Total cost-of-living support package of $2.3 billion, including:

$30 million for Solar Homes hot water rebate.
$50 million for a new Power Saving Bonus.
$18 million for food relief programs.
$9.1 million for financial support through Good Money and Mortgage Stress Victoria.
$859 million to continue Free Kinder for three and four-year-olds.
$171 million for TAFE and training subsidies.
$152 million to increase the Camps, Sports and Excursions Fund to $400 per eligible student.
$318 million to provide free public transport for children under 18.
$2.2 million to offer free public transport for seniors on weekends.
$529 million to reduce healthcare costs through expanded access and zero-cost consultations.

✔ Regional and Rural Victoria

$1.5 billion investment across regional communities.
$777 million for transport upgrades, including roads and regional rail operations.
$117 million for education infrastructure in 12 regional schools.
$216 million for regional healthcare, including ambulance and hospital resourcing.
$54 million for agriculture, biosecurity, and emissions reduction research.
$60 million for cultural and nature-based tourism and events.

✔ Energy, Environment and Climate Action

$288 million investment in energy transition initiatives.
$152 million to maintain safe, affordable, and reliable energy supply.
$13 million to progress offshore wind development.
$125 million to continue the Environment Protection Authority’s functions.
$30 million to expand Solar Homes hot water rebates.
$12 million for home insulation under the Victorian Energy Upgrades Program.
$48 million for animal welfare and biosecurity programs.
$17 million for Landcare and Coastcare volunteer programs.
$11 million for half-price camping and free zoo access for children under 16.

✔ Safe and Inclusive Communities

The 2025–26 Budget invests in reforms and services to promote safer, fairer, and more inclusive communities across Victoria:

$1.6 billion for the justice and community safety system, with a focus on crime prevention and repeat offending.
$727 million community safety package to implement bail law reforms.
$297 million for child protection and family services.
$172 million to prevent and respond to sexual and family violence, including case management and justice services for victim-survivors.
$290 million to support victims of crime, including the new Financial Assistance Scheme.
$114 million to open the Wyndham Law Courts.
$92 million for policing and community safety, including firearm reforms and support for Neighbourhood Watch and Crime Stoppers Victoria.
$206 million to enhance emergency services through new technology, fleet, and facilities.
$100 million to strengthen cybersecurity across government agencies.
$65 million to create a unified liquor and tobacco regulator.
$77 million to support multicultural communities through language programs, migrant advocacy, and social integration initiatives.
$19 million for specialised mental health and community support services for LGBTIQA+ Victorians.
$552 million for the creative industries, including events, screen sector growth, regional touring, and digital game development.

At Strategem, we’re here to help you make sense of what these changes could mean for you.

Need clarity on what the Budget means for your circumstances?
Book a chat with one of our advisors and let’s plan your next move together.

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