"Today's Victorian Budget does little to build the economy while saddling Victorians with yet more debt," said Tim Piper, Victorian Head of the national employer association, Australian Industry Group.
"Victoria already has some of the weakest economic conditions in the country, and with the impacts of the global energy crisis this budget will be seen as contributing to the malaise.
"The Budget avoids bringing spending under proper control, while adding another $18 billion of new spending to the books.
"Ironically, one of the few areas of spending reduction next year is public order and safety, which will come as cold comfort to citizens and businesses alike facing rising crime rates.
"There is the expected mix of pre-election goodies – free public transport and car registration rebates – alongside new traffic camera fines and congestion charges.
"$5 billion has also been set aside as contingencies, which heading into an election points to more spending yet to come. S&P has already warned this could impact the State's credit rating – a worrying outcome when debt servicing costs are forecast to push $12 billion p.a.
"For the rest of the economy it's small-beer reforms. AI and data centres are two of the biggest trends changing our economy, with huge growth and potential disruption. The Government isn't getting in the way, but the package for growth and skills is miniscule compared to the challenge of retraining employees and minimising growing pains.
"Business continues to struggle under rising cost pressures and with mounting State government tax burdens. The only relief here for business is that there is no new tax grab.
"The problem is that Victoria's economy faces major risks. At the start of 2026 business sentiment was already much weaker in Victoria, and other parts of Australia beckon as more affordable and more open for business.
"Now a global energy and supply chain crisis has been unleashed by war in the Middle East. The Budget recognises the serious uncertainties about the war and the flow through of its impacts. But we do not know the full impact on the global, national and local economies.
"We would have more options to respond to a crisis if the Budget were already stronger and debt lower. We would have more resilience to survive and thrive through global challenges with a sustained focus on productivity and reform. A steady course following the path of least resistance can be more hazardous than it looks.
"What we don't want to see is a further spending splurge in the lead-up to the election," Mr Piper said.
Further comment:
Tim Piper – 0411 430 301
