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State Budget 2014-15



On taking office, Victorian Premier Denis Napthine made two vital commitments. He said he intended to lead a compassionate Government that looks after disadvantaged Victorians and that he wanted all Victorians to share in the benefits of the state. This election year Budget offers that opportunity, and that responsibility. The benefits of social investment go beyond individual recipients, whose lives markedly improve, but also accrue to the broader community and economy.

Good social policy is also good economic policy. Excluding some Victorians from participation in the economy not only risks more social problems that will cost us dearly in the future – in the form of more prisons, hospitals and other acute responses to issues – but also represents lost productive capacity which, as our population and economy changes, we cannot afford to ignore.

Population, productivity and participation

Victoria is undergoing unprecedented demographic change. Our population continues to grow quickly but unevenly across the state, and has local differences in its size and demographics. This means there is no one-size-fits-all strategy for government to invest wisely. Across old industrial suburbs, new growth suburbs, booming regional cities and declining rural towns, very different responses are required to achieve good social and economic outcomes.

Victoria’s future success relies on a smooth transition from an industrial economy into an internationally competitive services economy, and arresting our declining productivity in the process. To do this, we will need to build our workforce capabilities so as many Victorians as possible are able to work to their potential. Those capabilities are not developed merely through big infrastructure projects, but through addressing the real issues that stop vulnerable Victorians from completing school, developing good skills and getting good jobs.

Addressing these problems is a pre-condition to increasing workforce participation. If people face acute disadvantage – through financial stress, chronic health conditions or disability, homelessness, problem drug or alcohol use, isolation, or exposure to violence, abuse or neglect – then they will have little chance of participating in the workforce. Many of our children and young people, who will make up our future workforce, do not have safe and secure homes, miss out on school, and experience physical and mental ill-health and disability. Unless we act early, they will live marginalised lives as adults.

Workforce participation will also be improved with additional support for parents and carers to participate in paid work, such as through high quality early childhood education and care and ensuring a smooth introduction of the NDIS. We also need to support workers who are shifting from declining industries, moving back to work from caring or parenting responsibilities, or trying to overcome long-term unemployment. We cannot have ‘stranded workers’ if Victoria is to maximise productivity.

It also means we will need to focus on helping older workers stay in employment if they wish, knowing their participation allows us to generate the revenues required to maintain services to an ageing population. To keep our workforce healthy as it ages, we will have to invest more heavily in health promotion to prevent ill-health, and to intervene earlier in the onset of chronic illness.

Affordable living

To be part of a community that thrives and flourishes, we need to be all able to afford the basics in life. Community services and planners are pointing to a growing social divide across Victoria, which requires action to avoid entrenched disadvantage and intergenerational poverty.

Housing is the largest living cost for most Victorians. Rapid increases in housing costs means more people are being pushed to areas with poor access to jobs and services. Affordable housing is not affordable if it is offset by other costs – such as distance from jobs, education, health-care and community services, and with few transport options. Low-income households also need
affordable access to the necessities of life, such as water, energy, transport and food, or risk being tipped into crisis due to financial stress.

A strong concession framework supports affordable access to essential services. Improving public transport and the design of our cities and regions will cater to more diverse needs, so everyone can get where they need to go, without the expense of a private car – whether it’s school, training, jobs or support services. Education support must be strong and targeted so no child misses out on essential school activities due to a lack of money.

Spending smarter

At a time when traditional revenue streams are slowing, it is essential that the Victorian Government prioritises spending that will pay dividends in the future. In the long-term, it is far better to prevent social problems before they occur, rather than creating ever more demand in the future for scarce resources. We cannot continue to build larger prisons, hospitals and roads – it is far more cost effective to divert people from crime, prevent ill health, and move to more universal and efficient modes of transport.

It is also a time when government should examine its existing expenditure, and begin to shift the proportion of expenditure to prevention, early intervention and demand management, creating both more inclusive communities and a stronger budget bottom line.

Acting now

If we believe that all Victorians should share in the benefits of a strong State we need to act. This State Budget Submission proposes solutions to achieve that action.

Failure to act or misdirecting spending on expensive crisis responses will create more disadvantage and stop many in our community from making the most of their lives and our State.

The challenge in the 2014-15 State Budget is to share the benefits by creating a stronger society, a stronger economy and offer real opportunity to all Victorians.

Summary of budget priorities

Sharing The Benefits - Full report in PDF

Sharing the Benefits – Full report [PDF]

  1. Better early learning, education and skills

  2. Stronger children, young people and families

  3. Achieving better health and well-being

  4. Fix the housing affordability crisis

  5. Better transport and local support

  6. Relieve financial stress to avoid crisis

  7. Justice reinvestment and safer communities

  8. Effective services from viable community sector organisations

Media release: Time for Victoria to share the benefits

One year out from the 2014 State Election the Government needs to direct resources to where they are most needed if all Victorians are going to share in the benefits of a strong State. Read the full media release.