Budget 2018/19

GETTING THINGS DONE

Tim Pallas MPTreasurer of Victoria

15 May 2018

SELECTED ECONOMIC INDICATORS FOR VICTORIA AND AUSTRALIA, 2016-17 (PER CENT)

VICTORIA: ENGINE ROOM OF THE NATION

3.3

0.9

3.9 3.9

2.0

0.4

1.4

0.4

Real GSP growth Real GSP per capita growth Employment growth Full-time employment growth

Victoria Australia

Source: Australian Bureau of Statistics

FISCAL OUTLOOK

VICTORIAN FISCAL FORECASTS

Unit of measure

2016-17 actual

2017-18 forecast

2018-19 forecast

2019-20 forecast

2020-21 projection

2021-22 projection

Net result from transactions

$ billion 2.7 2.0 1.4 2.0 2.7 2.9

Government infrastructure investment

$ billion 9.1 11.6 13.7 10.0 8.9 7.6

Net debt $ billion 15.8 19.6 24.3 28.0 29.8 31.4

Net debt to GSP per cent 3.9 4.6 5.4 5.9 6.0 6.0

Source: Department of Treasury and Finance

AVERAGE REVENUE GROWTH*

5.2

13.5

3.24.0

1.5

7.7

2.7

5.5

7.4

5.1

8.6

1.6

2.83.3

0

2

4

6

8

10

12

14

16

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22

per

cen

t

Annual Revenue growth (Forecasts) Revenue growth (10 year historical average - 5.5%)

Revenue growth (forward year average - 4.0%) Revenue growth (2010-11 to 2014-15 average - 4.0% )

Forward year average – 4.0%

2011-12 to 2014-15 average – 4.0%

10 year historical average – 5.5%

Source: Budget Papers

TAXATION AND ROYALTY REVENUE PER CAPITA

OUR REVENUE BASE

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21

NSW

VIC

QLD

SA

WA

TAS

NT

ACT

$

Source: Department of Treasury and Finance, Interstate Budget and Budget Update Papers

VICTORIA’S REAL GSP GROWTH FORECASTS CONSISTENT WITH THE NATIONAL OUTLOOK

0.0

1.0

2.0

3.0

4.0

5.0

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22

Pe

r ce

nt

Real GSP/GDP growth forecasts

Victoria's GSP - 2018-19 Budget Victoria's GSP - Deloitte Access Economics (DAE)

Australia's GDP - Commonwealth Treasury Australia's GDP - RBA

Forecast

Source: Budget Papers, Commonwealth Budget Papers, RBA, Deloitte Access Economics

VICTORIA’S WAGE GROWTH FORECASTS CONSISTENT WITH THE NATIONAL OUTLOOK

0.0

1.0

2.0

3.0

4.0

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22

per

ce

nt

Wage price index growth forecasts

Victoria's WPI - 2018-19 Budget Victoria's WPI - Deloitte Access Economics (DAE)Australia's WPI - Commonewealth Treasury

Forecast

Source: Budget Papers, Commonwealth Budget Papers, Deloitte Access Economics

ANNUAL POPULATION GROWTH, 2007 TO 2017

POPULATION

0

1

2

3

2007 2009 2011 2013 2015 2017

per

cen

t

Victoria Australia

2018-19 2019-20 2020-21 2021-22

2018-19 Budget 2.2 2.1 2.0 2.0

Commonwealth Treasury*

2.2 2.2 2.2 2.1

POPULATION GROWTH FORECASTS FOR VIC

* December year end.

Source: Budget Papers, Commonwealth Budget Papers

VICTORIAN EMPLOYMENT

A STRONG ECONOMY THAT CREATES JOBS333 900 jobs created since November 2014

0

20

40

60

80

100

120

140

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

'00

0

Employment growth

Source: Australian Bureau of Statistics

3.1

4.45.0

4.55.3

5.8 5.4 5.4 5.54.6 4.7

9.1

11.6

13.7

10.0

8.9

7.6

2005-06 2007-08 2009-10 2011-12 2013-14 2015-16 2017-18 2019-20 2021-22

GOVERNMENT'S RECORD INFRASTRUCTURE INVESTMENT, BILLION ($)

BUILDING NOW FOR A BETTER FUTURE

Average GII 2005-06 to 2014-15 ($4.9 billion)

Average GII 2018-19 to 2021-22 ($10.1 billion)

Source: Budget Papers

$167 million to reduce the regional payroll tax rate from 3.65 per cent to 2.425 per cent – the lowest in Australia

$55 million for the Investment Attraction Assistance Program

$51 million to attract more tourists to Victoria

$22 million in specialised support programs to help long-term unemployed Victorians

$16 million to grow agriculture exports, farms and tourism

$14 million supporting Victorian small businesses

TOTAL BUSINESS TAX CUTS, MILLION ($)

CREATING JOBS AND WORKING WITH BUSINESS

Almost $500 million to benefit Victorian businesses

246.3

742.2

2011-12 to 2014-15 2015-16 to 2018-19

Source: Budget Papers

THE RIGHT SKILLS FOR THE JOB

With the right skills and training, Victorians can get the jobs they need for their future

$304 million for new TAFE and training places

$172 million to make training at TAFE free for priority courses

$120 million for three regional TAFE upgrades and better facilities for TAFE students

$109 million to assist students get the right career advice so they can make the right choices early on

$50 million for the Head Start Apprenticeships and Traineeships initiative

$44 million transforming apprenticeships to drive job opportunities in the modern economy

$26 million for secondary vocational pathways

$4.3 billion for better roads around Victoria

$4.2 billion in additional investment in our health and mental health system

$2.8 billion investment in schools

$1.9 billion for public transport

$858 million to continue Roadmap to Reform

$689 million for the Lara Prison Precinct

$266 million to protect our environment

$248 million to boost court capacity and fund more prosecutors

$242 million boost for women’s and community sport

$231 million to redevelop some of our most loved sporting venues

$115 million for police, prevention and protection

THE 2018/19 BUDGETThe Budget funds $9.4 billion in new output measures and up to $9.3 billion in new capital measures

A STRONGER, FAIR VICTORIA

Addressing energy and cost-of-living pressures

$48 million for the Power Saving Bonus – $50 payment to all Victorian households if they seek out a better electricity deal

$22 million to expand the Utility Relief Grants Scheme, which will increase the payment cap from $500 to $650

$172 million to make training at TAFE free for priority courses

RECORD INVESTMENT IN REGIONAL AND RURAL VICTORIA

TOTAL REGIONAL INVESTMENT*

* Includes the total value of output and asset related announcements made in Budget and Budget Update every financial year

2,771

1,656

830

1,953

1,331

3,383

4,470 4,387

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

$ m

illio

n

Source: Budget Papers

Budget 2018/19

GETTING THINGS DONE

Tim Pallas MPTreasurer of Victoria

15 May 2018