Infrastructure development has received a significant boost in Victoria with the state government committing a record $13.7 billion to this sector in their latest budget. The increased allocation for social and transport infrastructure spending in the election year budget aims to match the needs of a growing population as well as a booming jobs market.
Key announcements in the Victorian budget cover increased processing of planning permits ($9.7 million); speedier subdivision approvals by councils ($3.5 million); community infrastructure projects such as parks, swimming pools, sports grounds and community centres in Melbourne ($50 million); and 11 percent increase in spending on engineers, construction workers, apprentices, nurses and teachers among others.
The anticipated slowdown in the property sector will impact stamp duty revenue with an increase of only 3.8 percent to $7.1 billion in this financial year compared with an 11 percent growth in 2017-18.
While trends in auction clearance rates, residential building approvals and housing finance indicate moderation in the housing market, tax revenue from the commercial property sector will remain high thanks to low office space vacancy in Melbourne as well as strong growth in rental income and building approvals. Commercial duties from this segment increased from 14.3 percent to 24.3 percent between July and December last year.
Building finishing quality is another priority area for the government with new guidelines to be framed for the exteriors of Melbourne’s apartment towers.
Key winners in the 2018 Victorian budget include healthcare through new hospital constructions and redevelopments; transportation through new train services and upgrades, improved bus services, and suburban road upgrades; and education through new schools and upgrades.