Victorian Budget 2022-23: Health-Centred Budget Optimism

3 May 2022

Victorian Budget 2022-23: Health-Centred Budget Optimism

This afternoon, Treasurer Tim Pallas handed down his eighth Victorian State Budget, delivering a “Pandemic Repair Plan” that focuses on rebuilding after the COVID-19 pandemic. This is the Treasurer’s last Budget prior to the Victorian election in November 2022 and lands mid-Federal Election campaign, with the Federal Election to be held on 21 May. Mr Pallas noted that future generations may remember this “as a time when the Victorian community came together, to carve out new directions and to reach for better dreams.”

The Treasurer gave a positive outlook for the future of the state economy, acknowledging the state-wide unemployment rate of 4 per cent was at its lowest rate in Victoria’s history, and with 280,000 jobs created since September 2020, the government surpassed its job creation target of 200,000 jobs by the end of 2022. The Budget also confirmed that the state’s record debt is expected to rise further to $167.5 billion in 2025-26.

The 2022-23 State Budget delivered on step three of the Government’s four-step fiscal strategy, expected to restore the Budget back to an operating surplus of $650 million by 2025-26, marking an $18 billion recovery in four years. Mr Pallas also noted that the Budget made progress on step four of the fiscal strategy – to stabilise debt levels – with debt forecast to be $7.8 billion lower than predicted in last year’s Budget Update. In an attempt to further reduce the debt burden on future generations, the Budget also established the Victorian Future Fund from the proceeds of privatising VicRoads, which is expected to hold $10 billion in the medium-term.

From the outset, Mr Pallas thanked frontline healthcare workers for their efforts in battling the pandemic over the last two years. As such, healthcare spending formed the centerpiece of the 2022-23 State Budget, rebuilding the health system with a total investment of $12 billion. This included a $1.5 billion COVID Catch-Up Plan to accelerate elective surgery rates, with the goal of completing 240,000 surgeries annually by 2024. Additionally, Mr Pallas spoke to the goal of training and hiring 7,000 new healthcare workers, comprising 5,000 nurses, 2,000 of which will be hired through a global recruiting drive. Emergency workers will also see a $124 million boost for paramedics and $333 million to hire 400 staff to increase Triple Zero call-taking and dispatch capacity.

The 2022-23 Budget also targeted regional outcomes, with $300 million for the Regional Health Infrastructure Fund to upgrade operating theatres and medical equipment among regional and rural health services. Building on the focus on mental health outcomes from the 2021-22 Budget, the 2022-23 Budget also recorded a $1.3 billion investment in mental health, of which $372 million will be provided to train 1,500 mental healthcare workers.

In a budget focused on improving care outcomes for Victorians, Mr Pallas highlighted the importance of early social intervention, investing half a billion dollars to address issues for students in crisis, such as those exiting the justice system and those at risk of homelessness. To this point, the Treasurer emphasised the need to invest in education, offering $1.8 billion in funding for new schools and upgrades, including funding for an additional 13 new schools. Mr Pallas said this brought the total to 75 of 100 new schools to be delivered by 2026, as promised in 2018. A new vocational pathway will also be introduced to the VCE, costing $280 million, while $779 million will be spent to recruit around 1,900 more teachers.

To address growing cost-of-living concerns, the Government will make a one-off $250 Power Saving Bonus available to all support Victorian households for their power bills from 1 July. Reflecting on the need to provide “secure and safe” work, Mr Pallas heralded the pilot of Australia’s first Sick Pay Guarantee in Victoria, providing insecure workers up to five days’ sick pay every year. He also reiterated the Government’s commitment to fighting wage theft by supporting the Victorian Wage Inspectorate.

Building on the progress of the ‘Big Build’, the 2022-23 Budget offers a further $1 billion in low interest loans and government guarantees to the community housing sector to create up to 6,000 additional homes. After-hours homelessness services will also be supported by an $85 million package. The Regions are set to gain $2.6 billion in additional funding for infrastructure, housing and promotion to support the Commonwealth Games in 2026.  On infrastructure spending more broadly, Mr Pallas outlined how infrastructure investment will average $21.3 billion a year over the forward estimates by investing in railway and road upgrades, including $250 million to buy 12 more VLocity trains for regional Victoria and the $213 million will deliver the Mickleham Road upgrade. The Treasurer noted the State Government’s dissatisfaction with Federal Government co-investment in infrastructure saying that the state will receive “less than 6 per cent of new funding”, despite Victoria “having 26 per cent of the nation’s population”.

Businesses will benefit from a newly established Victorian Industry Investment Fund, offering $40 million in grants to support growing businesses. Creative industries will receive a $245 million “bounce back” funding allocation, with the planned transformation of the Melbourne Arts Precinct linked to attracting jobs and tourism to the State. Looking internationally, the Government will also establish a new trade and investment office in Paris to the tune of $40 million, seeking to improve opportunities for Victorian businesses to trade and grow their markets in the European Union.

Mr Pallas welcomed Victoria as the first state to introduce Gender Responsive Budgeting, offering $940 million in initiatives designed to improve outcomes for women, with $241 million to support victim survivors, including two new family violence refuges and six new crisis accommodation properties. LGBTIQ+ Victorians will also receive $15 million in funding for legal services, specialist health programs and pride events.

Continuing the Government’s climate change agenda, the 2022-23 Budget outlined new offshore wind targets, the first of any Australian jurisdiction. The policy sets a target of generating nine gigawatts of wind power by 2040. Mr Pallas noted that lower energy prices would be achieved by spending $215 million to increase renewable energy outputs and noted that prices are at their lowest level in five years.

For further information on key portfolio measures, please refer to GRACosway’s detailed briefings:


  • Net debt to reach $118.5 billion.
  • The unemployment rate will fall to 4 per cent.
  • The regional unemployment rate will drop to 3.2 per cent
  • Gross State Product (GSP) to drop to 3.25 per cent.
  • Infrastructure spend in 2022-23 is $21.4 billion.
  • Consumer price index is 2.5 per cent


For more information about the Budget, Victorian government, or to enquire about our public affairs and government relations services, please contact our Melbourne office on +61 3 9660 1400 or [email protected] or our senior staff below.


Richard King – Managing Partner – Public Affairs
+61 407 766 633
[email protected]


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