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Financial outlook

As a result of the Government’s strong financial management, Victoria had sound public finances coming into the pandemic, which has provided significant scope to support Victorians when it was most needed.

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Our low debt and strong credit rating placed the State in a strong position to face this once-in-a-century crisis.

Since the beginning of the pandemic, the Government has been supporting Victorians – delivering our State’s health response, supporting businesses and households, and protecting jobs.

More than $13 billion has been committed to support households, workers and businesses through the pandemic. This Budget builds on that support and delivers new investments to drive economic recovery.

Total revenue in 2020-21 is expected to be 4.2% lower than 2018-19 levels, while state tax revenue is forecast to decrease by 9.7% compared with 2019‑20. Net debt will reach $86.7 billion this financial year and grow to $154.8 billion by the end of the forward estimates.

Total expenditure is expected to be $90.0 billion in 2020-21, before declining by 6.2% in 2021-22. The projected peak in 2020-21 reflects the Government’s objective to support economic growth in the short to medium term, with this expenditure tapering as the economy recovers.

The combined impact of reductions in revenue from the global recession and increases in vital expenditure has resulted in an operating deficit of $6.5 billion in 2019-20 and a forecast deficit of $23.3 billion in 2020-21. Further operating deficits are forecast over the forward estimates. This is expected to reduce to a deficit of $5.9 billion by the end of the forward estimates, reflecting the short-term costs of initiatives funded in this Budget.

General Government Fiscal Aggregates

Reviewed 23 November 2020

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