Delivered on Tuesday, 7th May, the Victorian 2024-25 State Budget was titled “Helping Families” and took a strong cost-of-living focus whilst attempting to reign in spending to achieve a budget surplus by 2026. The Helping Families theme has resulted in key infrastructure spending spanning education, health, sports and transport, however, the budget reflects a shift in commitments demonstrating the impacts of cost blowouts on existing projects, the continued volatility of the construction industry and the need to address the state’s $2.2 billion deficit. 

A distinct lack of commentary in the media regarding infrastructure spending demonstrates the underwhelming nature of this year’s budget for our sector, however, there are some interesting insights to be gleaned that may inform your business strategy for the coming year. We’ve undertaken a thorough review and provided a summary of the budget initiatives most relevant to the built environment industry.

Education

Smaller practices targeting maintenance projects and kinder refurbishments and larger practices targeting new school projects stand to benefit most from the current funding announcements. School upgrade works suitable for medium-sized practices are somewhat constrained and include only schools funded at the planning stage in last year’s budget.  

Continuing to support the Education State initiative, the budget invests $1 billion to deliver 16 new schools to open in 2026 plus funding to enable the completion of additional stages of works at two recently opened schools. These schools include:

• Ballarto Road Primary School

• Casey Central Primary School

• Clyde Creek North Primary School

• Clyde Creek North Secondary School

• Cobblebank Secondary School

• Lockerbie Specialist School

• Mickleham South Primary School

• Plumpton Primary School

• Point Cook South Specialist School

• Tarneit Plains Primary School

• Toolern Waters Primary School

• Wollert Andrews Road Primary School

• Horseshoe Bend Primary School

• Leneva (Frederic Street Road) Primary School

• Wallan East Primary School

• Warralily Park Primary School

• Mickleham Secondary College

• Wollert Secondary School

In addition, the State commits to spending $753 million to upgrade and maintain existing schools across the state, including:

• $250 million for school maintenance projects;

• $227 million for classroom and facilities modernisation and upgrades at 25 schools (18 metro and 7 regional), noting that the planning phase of these projects had been funded under the previous years’ budget;

• $187 million for new learning environments within relocatable facilities to accommodate demand in some of the state’s fastest growing schools;

• $48 million for the expansion of Alamanda K-9 College and Strathtullah Primary School to provide greater permanent capacity;

• $25 million for minor, priority building upgrades through the Capital Works Fund; and

• $15 million for the ongoing Accessible Buildings Program, focusing on supporting existing schools to create more inclusive learning environments.

With the Best Start, Best Life reform well underway to introduce Free Kinder for families with three and four-year-olds, the budget invests $19 million in new Building Blocks grants for kindergartens to renovate and refurbish their existing facilities. In addition $9 million has been allocated for the upgrade of kinder buildings and facilities to enhance safety and inclusivity. However, the intention to increase the Free Kinder hours from 15 hours to 30 hours by 2026 will not be achieved in the current budget, which confirms this target has been delayed to 2032.

Health

The budget will invest $1.7 billion to enhance hospitals and health infrastructure across the state, including:

• $813 million to commence planned works at the Northern Hospital;

• $535 to deliver a new ICU and operating suites and expanded maternity care facilities at Monash Medical Centre;

• $275 million for a new ED at the Austin Hospital;

• $118 million in infrastructure upgrades to The Alfred;

• $36 million for a new Community Health Hub in central Melbourne; 

• $40 million for the upgrade and replacement of essential engineering infrastructure at hospitals across the State; and

• $5.4 million to deliver a new mental health, alcohol and other drugs emergency department hub at Ballarat Base Hospital. 

Unfortunately, plans to build three new community hospitals in Emerald Hill, Eltham and Torquay do not feature in this years’ budget and are unlikely to go ahead.

Housing

With significant investment in housing announced in previous budgets, it’s no real surprise that this budget doesn’t contain any significant new capital spending announcements for housing. With over $2.5 billion committed to existing social and affordable housing projects this financial year, new budget investment announcements focused more on support services. However, an unnamed amount of funding has been allocated to promote modern methods of construction in the residential sector.

Sport

The budget builds upon last year’s initiatives to enhance sporting facilities across regional Victoria with a conservative investment of $18 million for building and upgrading community sports infrastructure across the state, including:

• $8 million delivered via community sports grants for new sports and recreation facilities

• $5 million for new pavilions, sports fields, courts, play spaces and skate parks where there is strong community need

• $4.2 million for upgrades to rural/regional/outer metro community football and netball facilities 

In addition, the budget has committed $4.1 million to maintenance works at the Kardinia Park Stadium.

Transport

While the Our Big Build project will continue to be supported in the budget, the elephant in the room is the significant delay of two major infrastructure projects: the $13 billion Melbourne Airport Rail Link (delayed until at least 2033) and the Upfield Train Line level crossing removal (delayed until at least 2030). The Big Build funding will include:

• $133 million for the upgrade of the regional rail network, including the 150-year-old train tunnel between Geelong & Geelong South

• $21 million for public/active transport upgrades

• $20 million to build roads and unlock government-owned land in East Werribee to support the future development of key community infrastructure such as schools

The budget also notes the discontinuation of the Improving the Calder Freeway (Calder Park) project and the Rural and Regional Roads Package Rutherglen project due to withdrawn Commonwealth funding.

Sources: VSBA - Budget builds on Growing Schools and Kinders, Vic Gov - Our Big Build, Budget Paper No. 4 - State Capital Program, Budget Overview - Helping Families, Dept of Health News - Record health investment supports all Victorians, ABC News - Who are the winners and losers in Victoria's 2024 state budget?