2013-14 VICTORIAN BUDGET
The Victorian Budget for 2013-14 was handed down on 7 May 2013. The Budget is notable
for its predicted improvement in revenues, which strengthen the underlying financial position
of the Victorian Government. The operating result is expected to improve markedly over the
next four years, with a surplus of $224.5 million in 2013-14 and average surpluses forecast at
$1.27 billion over the four years to 2016-17.
The Budget is primarily concerned with ensuring sufficient cash flows to fund major
infrastructure projects in the future without increasing borrowings. Net borrowings are
expected to peak in 2014-15 in nominal terms, before reducing over time.
Of the limited new funding initiatives included within the Budget, the Victorian Government
has prioritised infrastructure investment, with allocations made in the following areas:
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Transport related infrastructure, including the first stage of the East West road
project, new trains, level crossing upgrades, and re-funding road maintenance, and
Additional capital spending for education and health facilities
The most notable funding initiatives relevant to local government include the following:
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$34.5 million over four years for improvements to the enforcement of unpaid fines and
infringements. Local government unpaid infringements exceed $100 million and
reforms to the powers to collect fines will improve councils’ financial position and
improve the integrity of the infringement system.
$7 million in 2013-14 for kindergarten and children’s services infrastructure
$12 million over four years for the implementation of the Victoria’s Waste and
Resource Recovery Policy
It is pleasing that the Country Roads and Bridges program and the Local Infrastructure
programs have remained funded, despite the ongoing financial pressures for the State.
It is understood that public library funding is being maintained in line with the deal negotiated
between councils, the MAV and the Victorian Government, which includes future indexation
of the program. At the time of writing, it was not clear what indexation rate will be applied to
the program, although we have receive assurances that no funding cut or efficiency dividend
will be applied to the program.
While the Victorian Government has made a significant investment of $140 million for HACC
over four years, it is understood that the whole of the funding is to maintain their current
matched contribution in line with their agreement with the Commonwealth. The MAV will
continue to monitor the funding of this program and will provide advice when more
information is available.
1
Assessment against MAV Budget Submission
The following table provides a comparison between the issues highlighted in the MAV
submission and the funding commitments made in the 2013-14 Budget. In a tough budgetary
environment, the proposals endorsed by the MAV only received limited support.
Table 1: Assessment of MAV requests
MAV REQUEST
$7.6 million over four years for the
continuation of the School Focused
Youth Service
$400 000 over four years for an MAV
officer to progress youth service
policy
BUDGET 2013-14
No allocation
Joint state/local government capital
plan for children’s services
$7 million in funding for children’s services
and kindergarten facilities in 2013-14
DEECD to support councils’ joint
infrastructure plans to feed into the
joint infrastructure plan
Continuation of the operational and
capital funding by the
Commonwealth and Victorian
governments
As above
Continued Victorian Government
support for community infrastructure
in growth areas
Investment in new education facilities in
growth areas
Long-term funded transport plan
Large infrastructure investment across
health, education and transport. No
coordinated plan released which indicates
priority funding initiatives
Local regional
infrastructure
Continuation of the funding for the
Regional Infrastructure Fund and the
Country Roads and Bridges program
Programs continued
Domestic
wastewater
$20k per council to update their
domestic wastewater management
plans
$150 000 for council training
No allocation
Funding for the implementation of
the priorities of the White Paper
No funding arising from the White paper
Continuation of the Municipal Fire
and Emergency Management
Resourcing Program
Funding for councils to undertake
planning scheme amendments to
recognise flood prone areas
Further funding through the White
Paper process for flash flood
warnings to be allocated to the
relevant control authority, not local
government
As above
Youth
Early years
Community
infrastructure
in growth
areas
Emergency
management
No allocation
As above
No allocation
As above
As above
INITIATIVES OF INTEREST TO LOCAL GOVERNMENT
The following include initiatives of direct and indirect relevance to local government arising
from the Budget.
Infringements System

$34.5 million over four years to reform the collection and enforcement of unpaid fines
in Victoria. Funding will include increased enforcement capacity, sanctions and more
payment options. Funding may be provided for ICT improvements. It is understood
that consultation with the sector on the nature of the reforms will commence shortly.
Community Services
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$7 million in 2013-14 for kindergarten and children’s services infrastructure
$4.4 million over four years to attract qualified early education educators
$140 million over four years for the Home and Community Care program. It appears that
this funding is solely to provide the required matched state funding under the
Commonwealth-state funding agreement. In the past, the Victorian Government has
provided significant unmatched funding and it is understood that while this funding has
been maintained, it has not been indexed. The indexation factor applied to the matched
funding has yet to be announced.
$12 million for the Services Connect program, which will join-up government services for
at-risk communities
$55.2 million over four years for increased pensioner concessions including utilities,
council rates and the Fire Services Property Levy. It is understood that the funds
reflect an increased number of pensioners and do not reflect an increase in the real
value of concessions.
$2 million over four years for the Driving Youth Enterprise program, which provides
funding for three Victorian local government areas to manage safer annual school-leaver
celebrations. The program also supports the involvement of business and enterprise of
people aged 18-25.
$3 million over two years for the State Library of Victoria to drive a long-term vision and
strategy.
Emergency Management
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$60.8 million over two years for CFA facilities under the ‘Bushfire response –
emergency services’ initiative
$33.7 million for an increase in planned burning
$7 million over two years for the removal of fire-affected trees on public land
Transport and Infrastructure
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$80 million for rural road maintenance for the arterial road network over two years
$3.7 million over two years for the continuation of the Melbourne Bike Share scheme
$177.4 million over four years for the implementation of the Road Safety Strategy
2013-2022. Further funding is anticipated for the remainder of the Strategy.
$5.7 million over two years for the cycling strategy
$19.1 million over four years for the Darebin Creek Bike trail
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$294 million over two years for the first stage of East West Link. The project is
anticipated to cost $6 to $8 billion and will be delivered with the support of the
Commonwealth and private sector. The first stage will link the Eastern Freeway with
CityLink and will be put to market in late 2014.
$4.5 million over two years for improved train network signalling
$53.2 million over two years for the metro level crossing blitz program
$178.1 million over three years for eight further trains
$110 million over four years for the Port of Hastings development
$90 million over three years for the targeted road restoration program, which will
upgrade roads on high priority routes
Environment
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$12 million over four years for the Victoria’s Waste and Resource Recovery Policy,
which will provide funding for improving waste management infrastructure,
environmental performance of landfills and improved littering compliance.
$9.2 million over four years for the Coastal Environments program, for the protection
of assets across coastal regions in Victoria, including Port Phillip Bay and Western
Port
$7.2 million over four years for the implementation of the Cleaner Yarra River and
Port Phillip Bay Action Plan, which will fund communities, councils and businesses to
protect the health of the Yarra and Port Phillip Bay
$16 million over two years for grants to landholders, Landcare groups, Catchment
Management Authorities to protect key environmental assets, native vegetation and
threatened species
Regional and rural Victoria

$8 million over four years for increased regional tourism marketing
Revenue measures
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$183.4 million over four years will be collected through an expansion of the
Congestion Levy to short-term car parks in Melbourne
The efficiency dividend has been increased to 2.5 per cent from 2 per cent which will
apply to non-frontline staff, forecast to save $400 million over four years
OVERALL ECONOMIC POSITION
Victoria’s economic outlook has continued to decline since the last Budget. Weaker growth in
real state product is expected in the current financial year, before a rapid return to trend
growth by 2014-15. Employment growth is expected to return strongly in 2013-14, with an
associated reduction in unemployment.
The Government is forecasting an operating surplus of $224.5 million in 2013-14, increasing
to $2.55 billion by 2016-17. Victoria’s gross state product is expected to grow by a limited 1.5
per cent in 2012-13 and by 2.25 per cent in 2013-14.
Table 2: Victorian economic projections
Real gross state product
Employment
Unemployment rate
Consumer price index
Wage price index
Population
2011-12
Actual
2.3
0.8
5.4
2.3
3.5
1.6
2012-13
Forecast
1.50
0.5
5.75
2.25
3.50
1.70
2013-14
Forecast
2.25
1.50
5.50
2.50
3.50
1.70
2014-15
Forecast
2.75
1.75
5.25
2.50
3.50
1.70
2015-16
Forecast
2.75
1.75
5.00
2.50
3.50
1.70
2016-17
Forecast
2.75
1.50
5.00
2.50
3.50
1.70
Source: Budget Paper Number 2, p13
Grants and Transfers to Local Government
As shown in the table below, total grants and transfers to local government are expected to
remain stable in 2013-14. A major restructure of the departments have made comparison
between years difficult. Some caution should be exercised in interpreting these data
however, as it incorporates a range of funding programs including the Commonwealth
financial assistance and road grants. The Financial Assistance Grants program has included
early payments in recent years which influence comparisons over time. HACC and MCH
funding programs are excluded from these figures. In addition, major grants deriving from the
Department of Treasury and Finance relate to disaster reimbursements and are therefore
only provided in the aftermath of major disaster events.
Table 3: Grants and transfers to local government ($ thousand)
Department of Business and Innovation
Department of Education and Early Childhood
Development
Department of Environment and Primary Industries
Parks Victoria
Catchment Management Authorities
Department of Health
Department of Human Services
Department of Justice
Country Fire Authority
Department of Planning and Community
Development
Department of Premier and Cabinet
Department of Primary Industries
Department of State Development, Business and
Innovation
Department of Sustainability and Environment
Department of Transport
Department of Transport, Planning and Local
Infrastructure
Department of Treasury and Finance
Total grants
2012-13
Budget
3 987.9
503.0
2012-13
Revised
9 9036.9
503.0
2013-14
Budget
na
7 529.2
na
1 110.2
765.0
..
3 908.3
8 226.4
882.6
687 544.3
na
62.5
765.0
..
3 908.3
5 064.4
882.6
447 147.1
21 790.7
62.5
765.0
..
4 006.0
6 164.4
926.7
na
8 046.5
611.0
na
5 046.5
232.0
na
10 495.6
na
69 312.9
6 865.0
72 447.0
na
15 554.3
89 771.0
na
na
na
732 778.2
175 932.0
975 829.2
280 019.0
858 892.6
14 704.0
859 535.1
Source: Budget Paper 3, p339.
FURTHER INFORMATION
All State Budget papers and media releases listed by Ministerial responsibilities are available
on the Victorian Government’s budget website.
For further information about the members brief, contact Owen Harvey-Beavis.
Website link: www.budget.vic.gov.au