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Catch-up: Dan Andrews’ debut budget

Victoria’s Andrews Labor government presented its first budget this week, increasing overall spending and boosting funds for services like education and health.

It’s been touted by Treasurer Tim Pallas as including the state’s largest ever education budget, and includes significant increases across a range of services. The Mandarin has collated funding changes by portfolio below.

Writing for Mandarin sister website Crikey, your correspondent emphasised that the Victorian government is thus far sticking to the script it wrote prior to the 2014 election, especially when compared to how the Abbott government went about last year’s federal budget:

“Two things stand out: it basically sticks to what Labor promised at the election, and it delivers on health, education and public transport – the issues people continuously tell pollsters are among their biggest concerns at election time, and which are increasingly being squeezed as Melbourne experiences continuing population growth.

“Pallas announced the budget would deliver on 96% of Labor’s election promises – a suspiciously exact figure that nonetheless conveys the new government’s fealty to doing what it said it would.

“The budget makes a strong start on living up to the vow to make Victoria the ‘education state’ by delivering the largest-ever education budget of $3.9 billion. Importantly, the slated funding will be better targeted to the neediest schools – many in growth and regional areas – and the starved TAFE sector.

” … The health system will receive a boost of 6.2% in the next financial year, with a new women and children’s hospital for the western suburbs, four suburban hospitals receiving upgrades and mental health services gaining an extra $118 million. There is almost nothing for hospital IT upgrades, however.”

They’re paying for these spending increases with “surging GST, stamp duty, insurance and motor vehicle tax revenues”, argued Tom Burton:

“Announcing the previous government’s 2.5% cap on expenditure growth was not able to deliver the services required, the Victorian Treasurer Tim Pallas — handing down the 2015-16 State Victorian Budget on Tuesday — said expenditure growth would be maintained at 3% across the forward estimates.

“Pallas said average revenue growth was estimated to be 3.4%, which was predicted to see operating surpluses totalling $5.8 billion over four years.

“The level of total tax revenue is expected to grow by 4.1% to $19 billion this coming financial year and to maintain a healthy growth of 3.9% over the next four years.

“Victoria is also set to gain a windfall from the GST with State Treasury estimating growth of 7.5% in GST revenues, contributing to an overall average 3.8% growth in grant income from the Commonwealth.

“The 3% increase in over all operational spending will see expenses increase to $54 billion for 2015-16.

“The biggest increase in spending is in staffing which accounts for 42% of all operating expenditure. Staffing costs are expected to rise by 7.1% to $23 billion in 2015-16. These reflect promised pay rises to emergency services and nurses. Staffing costs are expected to grow at 3.4% on average across the next four years.”

The budget includes $15 million for the creation of a new super service agency, modeled on the highly successful Service NSW, revealed Burton:

“The new agency will provide a whole of government approach to service delivery through a single web portal and will aim to bring together government transactions and information spread across hundreds of phone hotlines and 538 different web sites.

“The commencement of planning for new Victorian super digital agency follows the creation of a similar agency in NSW. Over the last two years Service NSW has rapidly unified access to over 400 different agencies transactions into one digital portal.

“Service NSW has also created single shopfronts to provide a multiplicity of government services from one physical location and to enable access to digital services through dedicated kiosks.

“We don’t need almost a thousand different websites and hotlines for things like car registration and birth certificates. Service Victoria will get rid of the inefficiencies that are currently wasting time for families and businesses,” said Special Minister for State Gavin Jennings.

“Jennings said the new agency will focus on highest volume government transactions to modernise the delivery of these services.”

Department of Economic Development, Jobs, Transport and Resources

Trade, Industry and Enterprise Innovation and Tourism, Major Events and International Education will see significant cuts. The Major Projects budget is scheduled to be lower, though according to the Budget, this “reflects the lower cost of sales (land) for the Kew Residential Services Redevelopment.” The increase in money for Port and Freight Network Access reflects funding for the National Heavy Vehicle Regulator, as well as a general increase in funding.

Portfolio 2014-15 budget ($million) 2014-15 revised ($million) 2015-16 budget ($million) Variation between 2014-15 budget and 2015-16 budget %
Access, Industry Development and Innovation 67.7 65.2 61.9 -8.6
Creative Industries Portfolio Agencies 329.3 331 337 2.3
Cultural Infrastructure and Facilities 102.2 102.1 101.3 -0.9
Employment and Investment 113 109.2 199.1 76.2
Industrial Relations 2.8 2.8 3.4 21.4
Industry and Enterprise Innovation 125.8 117.6 108.4 -13.8
Major Projects 94.2 128.3 19.5 -79.3
Regional Development 214.5 203.8 163.4 -23.8
Tourism, Major Events and International Education 88.9 185.6 40.8 -54.1
Trade 37.3 35.3 14.4 -61.4
Agriculture 388 376 341.9 -11.9
Energy and Resources 154.8 105.1 154.1 -0.5
Sustainably manage fish, game and forest resources 72 83.2 83.2 15.6
Bus Services 996.9 987.8 1032.8 3.6
Integrated Transport 20.4 20.3 19.1 -6.4
Port and Freight Network Access 52.4 87.8 68.2 30.2
Road Asset Management 445.7 486.4 402.1 -9.8
Road Operations and Network Improvements 918.4 1064 1017.3 10.8
Taxi and Hire Vehicle Services 86.6 93.9 90 3.9
Train Services 2582.7 2633.8 2755.2 6.7
Tram Services 604.3 603.4 645 6.7
Transport Safety, Security and Emergency Management 301.1 285.8 326.7 8.5
Total 7799 8108.4 7984.8 2.4

Department of Education and Training

The Early Childhood Development and School Education is down at least in part due to a projected decline in the 4 year-old cohort in 2015 only. The increase in money for Support Services Delivery is thanks to new initiatives including funding for affordable school uniforms, the Safe Schools Coalition and a camps, sports and excursions fund.

Portfolio 2014-15 budget ($million) 2014-15 revised ($million) 2015-16 budget ($million) Variation between 2014-15 budget and 2015-16 budget %
Strategy, Review and Regulation 102.8 102.9 101.9 -0.9
Early Childhood Development and School Education 522.5 531.3 491.1 -6
School Education – Primary 4336.5 4411.9 4598.1 6
School Education – Secondary 3672.6 3726.8 3866.2 5.3
Higher Education and Skills 2323.3 2424.1 2476.3 6.6
Support Services Delivery 272.4 275.3 305.8 12.3
Support for Students with Disability 835.5 835.5 860.4 3
Total 12065.6 12307.8 12699.8 5.3

Department of Environment, Land, Water and Planning

Local Government will see a boost thanks to the new $50 million Interface Infrastructure Fund to support councils and communities in outer suburban areas to deliver improved local infrastructure. Environment Policy and Effective Water Management and Supply will rise as part of the Climate Change Action Package, “to support industry, local government and community organisations to invest in actions to reduce emission and adapt to climate change.”

The reduction in funding to the Fire and Emergency Management section “primarily reflects the completion of initiatives implemented in response to the recommendations of the 2009 Victorian Bushfire Royal Commission offset by additional Government investment provided in the 2015-16 Budget papers for Managing safety risks posed by fire damaged trees and Planned burning and fuel management.”

Portfolio 2014-15 budget ($million) 2014-15 revised ($million) 2015-16 budget ($million) Variation between 2014-15 budget and 2015-16 budget %
Office of the Vic Govt Architect 1.8 1.7 1.7 -5.6
Planning, Building Heritage 109.3 90.8 120 9.8
Environmental Policy 32 45.1 48 50
Environmental Programs 81.3 86.2 81.5 0.2
Statutory Activities and Environment Protection 131.5 134.1 154.1 17.2
Land Victoria 77.3 80.3 65.8 -14.9
Management of Forests, Parks and Public Land 290.9 291.9 304.2 4.6
Effective Water Management and Supply 452.8 473.5 603.3 33.2
Local Government 59.7 66.4 112.1 87.8
Fire and Emergency Management 357.6 382 335.1 -6.3
Total 1594.2 1652 1825.8 14.5

Department of Health and Human Services

Acute Health Services will be boosted by an additional pool of funding allocated to increasing elective surgery activity, responding to hospital services and opening new hospital beds.

Portfolio 2014-15 budget ($million) 2014-15 revised ($million) 2015-16 budget ($million) Variation between 2014-15 budget and 2015-16 budget %
Acute Health Services 10275.3 10304 10967.1 6.7
Ambulance Services 696.5 711.8 736.6 5.8
Mental Health 1260.6 1242.7 1309 3.8
Ageing, Aged and Home Care 1203.7 1230.2 1288.6 7.1
Primary, Community and Dental Health 462.3 472 452.3 -2.2
Small Rural Services 560.2 556.8 578.7 3.3
Public Health 328.8 329.9 339.3 3.2
Drugs Services 165.1 172 181.3 9.8
Disability Services 1677.3 1671 1780 6.1
Child Protection and Family Services 847.1 866 990.8 17
Youth Services and Youth Justice 141.1 142.7 155.7 10.3
Concessions to Pensioners and Beneficiaries 718.1 665 711.2 -1
Housing Assistance 398.9 428.5 420.8 5.5
Empowering Individuals and Communities 147.7 148.8 137.5 -6.9
Total 18882.6 18941.3 20048.9 6.2

Department of Justice and Regulation

Funding for Enforcing and Managing Correctional Orders will increase: “critical infrastructure in the men’s correctional system will be expanded to meet growth in the prisoner population. For the first time since 2000, additional high security forensic mental health beds will be provided at Thomas Embling Hospital.”

Police will get money to hire 400 custody officers to supervise prisoners held in police cells, as well as to upgrade the police analogue radio system to digital.

Portfolio 2014-15 budget ($million) 2014-15 revised ($million) 2015-16 budget ($million) Variation between 2014-15 budget and 2015-16 budget %
Policing 2434.6 2448.2 2512.4 3.2
Infringements and Enhancing Community Safety 259.5 247.4 268.1 3.3
Supporting Legal Processes and Law Reform 333.6 339.6 335.2 0.5
Personal Identity and Individual Rights 34.1 35.7 32.9 -3.5
Enforcing and Managing Correctional Orders 1095.4 1041 1221.7 11.5
Supporting the State’s Fire and Emergency Services 933.1 947.8 955.4 2.4
Industry Regulation and Support 239.3 244.8 252.5 5.5
Total 5329.7 5304.5 5578.2 3.3

Department of Premier and Cabinet

The Victorian Public Sector Commission (VPSC) will be funded to undertake priority organisational reviews.

Portfolio 2014-15 budget ($million) 2014-15 revised ($million) 2015-16 budget ($million) Variation between 2014-15 budget and 2015-16 budget %
Policy Advice and Support to Govt and Cabinet 104.3 113.9 122.8 17.7
Strengthening Communities 50 47 69.2 38.4
Public Sector Governance and Accountability 93.2 121.9 157 68.5
Project prioritisation and investment 5.4 4.1 44.1 n/a
Total 252.9 286.9 393.1 55.4

Department of Treasury and Finance

Portfolio 2014-15 budget ($million) 2014-15 revised ($million) 2015-16 budget ($million) Variation between 2014-15 budget and 2015-16 budget %
Budget and Financial Policy Advice 15.3 12 11.7 -23.5
Financial Reporting 9.3 10 9.5 2.2
Financial and Resource Management Frameworks Maintenance and Support 4.3 4.4 4.5 4.7
GBE Performance Monitoring and Financial Risk Management 11.8 33.3 19.1 61.9
Revenue Management Services to Government 81.4 81.2 93.8 15.2
Economic and Financial Policy 17.2 18 17.4 1.2
Economic Regulatory Services 17 16.6 17.6 3.5
Land and Infrastructure Investment Management 26.1 23.5 23.6 -9.6
Resource Management Services to Government 47.4 52.9 44.7 -5.7
Total 229.8 251.9 241.9 5.3

Victorian Auditor-General’s Office

Portfolio 2014-15 budget ($million) 2014-15 revised ($million) 2015-16 budget ($million) Variation between 2014-15 budget and 2015-16 budget %
Victorian Auditor-General’s Office 39.7 39.8 40.8 2.8

Read more at the Mandarin: New super service agency for Victoria

Author Bio

David Donaldson

David Donaldson is a journalist at The Mandarin based in Melbourne.