Victoria’s budget is on track to post a dramatically smaller surplus than previously expected as the state government struggles to balance cost-of-living relief with rising infrastructure-fuelled debt.
Treasurer Jaclyn Symes will announce a projected $600 million operating surplus for 2025-26 in Tuesday’s budget which, if delivered, would be the first time Victoria’s day-to-day government sector running costs have been in the black since before 2020’s COVID-19 lockdowns. The expected surplus is, however, $1 billion smaller than that forecast six months ago.
Symes will also outline projections for an average $1.9 billion operating surplus in the following years, peaking at a forecast $2.4 billion surplus in 2027-28.
The positive annual balance sheet will still be overshadowed by the long-term costs Victoria continues to pay for massive infrastructure projects. When this expenditure is taken into account, the cash position of the budget remains in deficit.
The size of the state’s debt will continue to grow to an expected $187 billion in 2028, but Symes said its share of the overall economy will decline in future budgets. “By delivering a responsible budget, we can invest more in what matters most to Victorian families,” she said.