Key Points

Victoria: State Budget 2024-25
No new revenue measures announced.
Victoria: State Budget 2024-25
$11 billion in funding for Victoria’s Health System.
Victoria: State Budget 2024-25
Victoria expected to be back in surplus by 2025-26.

Victorian Treasurer the Honourable Tim Pallas MP delivered his tenth budget on Tuesday.  

According to the Treasurer, the focus of the Budget is around “helping families”, while making “sensible choices” and “building a strong future for Victoria.”  

Despite this rhetoric, the Victorian 2024-25 budget provides little in support for families, makes no significant tax changes and delays infrastructure spending, including the airport rail link and the Arden Hospital campus project, as a means to reduce the cash deficit.

Economic projections include:

  • Real Gross State Product (GSP) is forecast to be 2.5% for 2024-25, compared to 2.0% for 2023-24 and an actual of 2.6% in 2022-23. 
  • A budgeted net operating deficit of $2.2 billion for 2024-25, returning to surplus in 2025-26. Cash deficits are projected each year over the 4-year estimates. 
  • Net Debt will be $135.9 billion in June 2024 (22.3% of GSP), extending to $187.8 billion (25.1% of GSP) by June 2028 at the end of the forward estimates. 
  • Interest paid on debt is estimated to be $6.5 billion in 2024-25 and increasing to $9.3 billion by 2027-28. 
  • Employment is expected to increase by 1% in 2024-25, with unemployment rate at 4.25%.  The unemployment rate is expected to increase to 4.75% by the end of the forward estimates.

Taxation revenue is estimated to reach $36.9 billion in 2023-24 (compared to $34.9 billion in last year’s budget).  For 2024-25, taxation revenue is budgeted to be $38.9 billion, followed by growth of around 5% over the forward estimates.  The growth in the forward estimates taxation revenue looks optimistic compared to Gross State Product growth.

Revenue Measures

Commercial and Industrial Property Tax Reform

The key revenue measure re-announced in this budget is the Commercial and Industrial Property Tax reform measure.  This measure, which was first announced in the 2023-24 Budget,  will progressively abolish land transfer duty on commercial and industrial property, replacing it with a commercial and industrial property tax.

Commercial and industrial properties will move into the new system following the first sale after 1 July 2024.  Land transfer duty will be paid on this first sale one last time, with eligible purchasers having the ability to take out a transition loan (at a commercial-equivalent rate), facilitating the transition to the annual tax over 10 years.  Land transfer duty will not apply to future transfers of this land, provided it continues to be used for commercial or industrial purposes.

The new commercial and industrial property tax will commence 10 years after the first transfer post 1 July 2024.  The tax rate will be 1% of the unimproved site value of the land.  This measure will only apply to commercial or industrial properties sold after 1 July 2024.

For further information on the Commercial and Industrial Property Tax please refer to: Victorian Commercial and Industrial Property Tax.

Tax Receipts 

Estimated tax receipts for 2024-25 are $38.9 billion.  Significant contributors to this figure include: 

SRO Compliance

In addition to this measure, funding will be provided to the SRO to expand its range of tax compliance programs, as well as continue the modernisation of its technology to support more efficient tax administration and enhanced compliance.

Tax Decreases

The Victorian Government has announced a number of measures which relieve the imposition of certain taxes:

Payroll Tax

In a measure announced in the 2023-24 budget, the payroll tax-free threshold will be lifted from $700,000 to $900,000 from 1 July 2024 and to $1 million from 1 July 2025.  This measure is stated to apply to “small businesses”, with the payroll tax-free threshold to be phased out for larger businesses.

Land Tax Exemption

A stand alone Land Tax exemption will be introduced for land that is used to provide social and emergency housing.  This will include charity-owned land where social and emergency housing is under development.  This measure clarifies existing arrangements that owners of land used to provide social and emergency housing are not liable for Land Tax.  This exemption will commence in the 2025 calendar year.

Key Spending Measures

Key spending measures announced by Treasurer Pallas include:

  • $11 billion for Victoria’s healthcare system
  • $1.8 billion for build, maintain and upgrade schools (including delivering on the Labor Government’s promise to build 100 new schools by 2026)
  • $1.7 billion to building and improve hospitals, including new Emergency Departments for the Northern and Austin Hospitals
  • $996 million to switch on significant transport projects, including the Metro Tunnel and the West Gate Tunnel.

In distinction to last year’s Budget, this Budget is light on revenue measures in the face of Victoria’s burgeoning debt.  It is however noted that a State Tax Amendment Bill is to be introduced into the Victorian Parliament later this week.  Please contact your local RSM advisor to discuss the implications of this Budget for you.


Please contact your local RSM advisor to discuss the implications of this Budget for you.