Victorian State Budget 2017: Who are the winners and losers?

Victorian State Budget 2017: Who are the winners and losers?

5 May 2017

According to the new Victorian State Budget, the Andrews government is spending up big on infrastructure and police, but property investors look like they’ll be slugged with extra tax, proving there are definitely some winners and losers. So who are the winners and losers and what is the impact on the property industry?

WINNERS

Commuters

Commuters are definitely winners, with the Victorian government investing $1.45 billion in regional rail services and upgrades planned for the Gippsland and Warrnambool lines and the Surf Coast Rail Project.


“If we can better regional communities with Melbourne, if we can better connect between regional communities, that’s great for families, it’s great for employment,” Victorian Premier Daniel Andrews said.


About $100 million has also been pledged for the North East Link, otherwise known as Melbourne’s “missing link,” which connects the Metropolitan Ring Road at Greensborough with the Eastern Freeway or EastLink. The government has also pledged $300 million for the 9km Mordialloc bypass, which will take traffic from the end of the Mornington Peninsula Freeway in Melbourne’s southeast, to the Dingley Bypass. The government has also committed $10 million to investigate private Melbourne airport rail link options.

Health services


Health services will also be better off, with the government announcing $26.5 million to improve ambulance response times. The Maternal Child Health Service will also get $80 million for its expansion and $63 million will also go towards expanding the Monash Medical Centre emergency department, with an exclusive area for children.

Victoria will spend an unprecedented $1.9 billion combating family violence, more money than ever before, Treasurer Tim Pallas says. The funding is at the heart of the state’s budget, including 17 support and safety hubs across the state. “There is more money directed to family violence in this budget, than the state of Victoria has ever committed to family violence in all preceding violence combined,” Mr Pallas said on Tuesday.

Sport


Helping to keep its place as Australia’s sporting capital, Melbourne Park, the home of the Australian Open, will get a $271 million boost which will help fund a new 5000-seat sunken stadium, central terrace and outdoor public space. Two new match courts will also be built.

Victoria Racing Club will also have its Flemington Club Stand redeveloped, with the held of $128 million promised in the budget. Kardinia Park in Geelong — home of the Geelong Cats — will also be given almost $4 million for an upgrade.

Police


Police and community services will benefit from a $2 billion injection, to be put towards more police and other community services. There will also be $308 million committed to overhaul management of serious, violent offenders.

Schools


The Herald Sun reports some schools will receive $50.7 million to improve poor results and the government has committed $695 million to an education works program, which will be put aside for future schools in growing areas.

LOSERS

Property investors

Some property investors in Victoria may potentially have to reconsider the future of their investments following the introduction of a new tax and the closing of an existing loophole, reports Kirsten Robb in Domain.

The Vacant Residential Property Tax will be levied on properties left unoccupied for six months or more, a move likely to affect many foreign investors. Also, partners will no longer be able to transfer investment properties to one another tax free. The government is also getting rid of stamp duty concessions for investors buying off the plan.

First home buyers will not be liable for stamp duty on properties up to $600,000; and will receive cuts to the rate for properties up to $750,000. Regional Victorians will see their First Home Owner Grant double to $20,000. First home buyers who qualify for housing loans but do not have the deposit to buy will benefit from HomesVic, a new co-purchasing program. ABC News also reports that new suburbs will be opened up, with funding to fast-track approvals for new housing.

Renters may benefit from a long-term lease option whereby landlords and tenants wanting to commit to rental agreements of five years or more will be able to connect with each other.

Victoria’s active property market was key to the Victorian budget, with $6.2 billion in stamp duty and $2.4 billion in land tax revenue in 2017-18.

Also promised is a massive investment in new infrastructure, including improvements to regional train lines, planning the North East Link toll road, more level crossing removals, and the possibility of a rail link to Melbourne Airport. More than half a million dollars will be spent on building or upgrading schools. The Australian Financial Review reports that infrastructure investment will average $9.6 billion a year over the next four years.

The government is also seeking to attract start-ups and new businesses to Victoria, with a $90 million injection over the next two years.