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Public finance

Victoria's Budget: Land Taxes and Stamp Duty Boost Government's Tax Take

Strategic Insights

— 2 min read

The Victorian government is set to generate significantly more revenue from land taxes and stamp duty, with tax take projected to grow faster than the economy. According to the state budget, taxation revenue in 2025-26 is expected to hit $41.7 billion, increasing by an average of 4.7% over the next four years. Land taxes are forecast to reach $7.6 billion, growing at an average of 5.7%, while stamp duty is expected to reach $9.6 billion this financial year, forecast to grow at 5%. Despite these revenue increases, the government's net debt is projected to rise to $194 billion by 2028-29, with interest expenses expected to reach $10.56 billion.

Key Takeaways:

  • The Victorian government's tax take is projected to grow by an average of 4.7% over the next four years, with land taxes and stamp duty expected to contribute significantly to this increase.
  • Land taxes are forecast to reach $7.6 billion, growing at an average of 5.7%, while stamp duty is expected to reach $9.6 billion this financial year, forecast to grow at 5%.
  • Despite these revenue increases, the government's net debt is projected to rise to $194 billion by 2028-29, with interest expenses expected to reach $10.56 billion.
  • The government's reduced infrastructure spending, from $21.3 billion in 2025-26 to $15.6 billion in 2029, is intended to help rein in spending and reduce debt.
  • The consolidation of public services is projected to save $544.6 million over the next year, rising to more than $1 billion in 2027-28.
  • The government expects to cut 1200 full-time positions over the forward estimates, with ACTU officials estimating that could be equivalent to 23,000 full and part-time jobs.
  • Total spending is set to grow from $107.7 billion in 2025-26 to $115.4 billion in 2028-29, increasing by an average of 2.4%.
  • The government will add $9.3 billion to hospitals' operating budgets as part of an $11.1 billion increase in health funding.

Statistics:

  • Taxation revenue in 2025-26: $41.7 billion
  • Taxation revenue growth over the next four years: 4.7%
  • Land taxes: $7.6 billion, growing at an average of 5.7%
  • Stamp duty: $9.6 billion this financial year, forecast to grow at 5%
  • Net debt: $194 billion by 2028-29
  • Interest expenses: $10.56 billion by 2028-29
  • Infrastructure spending: $21.3 billion in 2025-26, reducing to $15.6 billion in 2029
  • Consolidation of public services: $544.6 million in savings over the next year, rising to over $1 billion in 2027-28
  • Reduction in business regulators: 37 to 18 or fewer by 2030
  • Estimated savings for businesses from regulator mergers: $500 million over the next four years

Sources:

  • "Victoria's state budget: tax take will grow faster than the economy as land taxes and stamp duty provide major windfalls" - The Australian Financial Review, November 2022

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