Victorian Budget 2025–26: Key Insights and Implications
The Victorian Government delivered its 2025–26 State Budget on 20 May 2025, positioning it as a “responsible” response to ongoing fiscal challenges, including a growing state debt. The budget focuses on supporting households, investing in essential services, and maintaining a commitment to no new taxes.
Headline Initiatives
- Cost of Living Relief: A record $2.3 billion is allocated to new and expanded cost of living measures, providing direct support and targeted programs for those most affected by rising expenses.
- Healthcare Investment: The budget allocates a record $11.1 billion to the health sector, funding nine new hospitals, emergency department upgrades, and enhanced mental health services.
- Transport and Infrastructure: The budget allocates $5 billion to upgrade public transport, including the Metro Tunnel and Sunshine Station. From 2026, children under 18 will travel free, saving families up to $755 per child each year. These investments aim to boost connectivity and drive economic growth.
- Education: The budget prioritises quality education with significant investments: $859 million for free kindergarten, $152.3 million for the Camps, Sports and Excursions Fund, $272 million for child protection, and $133 million to boost literacy and numeracy in schools.
- Housing: Measures to increase housing supply focus on helping more Victorians achieve home ownership and address affordability challenges.
- Community Safety: New laws and funding are directed at strengthening community safety and accountability for offenders.
- Regional Victoria: Dedicated investments ensure regional communities’ benefit from infrastructure and service improvements.
- First Peoples and Gender Equality: Ongoing support for self-determination initiatives and gender equality, including a dedicated Gender Equality Budget Statement.
Fiscal Strategy and Outlook
Despite rising debt, the government has maintained its pledge of no new taxes, opting for targeted spending and efficiency measures. The budget papers outline a pragmatic approach to managing the state’s finances, focusing on economic growth and fiscal responsibility.
Winners and Losers
- Winners: Households facing cost of living pressures, healthcare providers, students and schools, regional communities, and those seeking affordable housing.
- Losers: Some sectors may see limited new funding or face efficiency savings as the government seeks to contain expenditure growth.
Implications for Business and Individuals
- Businesses: Should monitor infrastructure and procurement opportunities arising from new capital projects.
- Individuals: Particularly those in lower-income brackets, may benefit from expanded cost of living support.
- Property and Construction: Sectors may see increased activity due to housing initiatives.
The 2025–26 Victorian Budget is shaped by the dual imperatives of fiscal restraint and targeted investment in essential services. With no new taxes and a focus on supporting families and communities, the budget seeks to balance immediate relief with long-term growth and stability.
For a detailed breakdown of specific initiatives and funding allocations, stakeholders are encouraged to review the official budget papers and departmental statements available on the Victorian Government’s budget website.
How MGIDC Can Help
Understanding the full implications of the Victorian Budget for your business or personal circumstances can be complex. MGIDC’s team of experts can help you:
- Analyse how the budget’s initiatives and funding allocations may impact your sector or business operations
- Identify opportunities arising from new government spending, including infrastructure and procurement projects
- Assess the effects of cost of living measures and other support programs on your household or workforce
- Navigate changes in policy or funding priorities relevant to your interests
Contact MGIDC on (03) 9069 7700 to arrange a personalised consultation and ensure you’re making informed decisions in light of the 2025–26 Victorian Budget.
