Victoria’s State Budget has accommodated funding for major projects initiated by the former Labor government, but will not start any new major projects because of the higher than expected debt incurred, according to Treasurer Kim Wells.
“Major projects inherited by this Government—including myki, the Regional Rail Link and HealthSMART—face significant cost overruns which total around $2 billion and have further contributed to the run-up of debt,” he said.
The state will incur a debt $7.5 billion higher than previously forecast due to a reduction in GST revenue, higher interest rates and “cost blow outs on existing projects”, Wells noted.
The Budget makes provision for HealthSMART at a cost of $6.7 million and will also undertake a number of minor projects such as hospital redevelopments and the construction or renovation of several schools.
The Victorian Government has also allocated funds to assist road repairs following floods earlier this year. Road projects will receive $601 million in total, which will also include upgrades to accommodate increases in traffic.
Wells said the government would also be more vigilant about projects in general, promising to increase “the rigour and oversight of major capital projects, with a mandatory process of scrutiny by the Department of Treasury and Finance and the Treasurer” and ensuring they were properly planned “not rushed through for the sake of a media conference with a hard hat”.