The Victorian Government has unveiled its 2026-27 budget, highlighting a $700 million operating surplus in 2025-26, while net debt and cash deficits continue to grow as the states capital expenditure projects continue to rise.
The Budget is shaped largely toward households, with most new spending focused on easing cost‑of‑living pressures and improving access to essential services like healthcare, education and transport. While families receive some relief and expanded support, there is little in the way of direct assistance for businesses, many of which are still grappling with rising costs, labour shortages and tightening economic conditions.
The Victorian treasurer has announced several key measures with the cost of living being front and centre.
- Public transport concessions
- 20% car registration rebates
- Support with the cost of raising kids
- Extension to the off-the-plan stamp duty concession
- Additional road maintenance funding
- Investment in better public transport
- Making it easier to get free healthcare
- Childhood education
- Payroll tax thresholds – non-government schools
- Regional Victoria
Public transport concessions
In addition to the two months of free public transport previously announced for April 2026 and May 2026, public transport will be half price until 1 January 2027. This includes trams, trains and buses across the state.
20% car registration rebates
The budget is cutting the cost of vehicle registration in 2025-26 by 20%, giving Victorians a rebate of up to $186 for people with one car and $372 for people with two cars. This applies to all Victorians who have registered and paid their light vehicle registration between 1 July 2025 and 30 June 2026.
The rebate will be open to all Victorians who own light vehicles (under 4.5 tonnes) for personal use, such as cars, utes, motorcycles, and light trucks. A key point for business owners is that company-owned vehicles registered under a company name are not eligible, the registration must be in an individual’s name.
To access this rebate Victorians will need to apply for the rebate through Service Victoria from 1 June 2026, with applications closing on Friday 31 July 2026.
Support with the cost of raising kids
The government has committed to continue to support families with the cost of raising kids, including:
- $28 million for the Affordable School Uniforms Program, saving $93 on average on uniform costs per application
- $24 million for outside-of-school-hours care for young Victorians with disability
- $16 million to continue and expand the Glasses for Kids program to more classrooms, delivering free vision screening and glasses for kids who need them
- $15 million for free admission for under 16’s to Melbourne Zoo, Healesville Sanctuary, Kyabram Fauna Park and Werribee Open Range Zoo on weekends, public holidays and during school holidays
- $14 million for School Breakfast Clubs to provide a free, healthy breakfast for those in need
- $11 million for approximately 55 000 more Get Active Kids Vouchers to help eligible families cover the cost of sports enrolment and any included equipment
- $7.4 million for Kinder Kits, which contain free books and educational toys, to help three-year-olds starting kinder to learn at home through play and reading.
Extension to the off-the-plan stamp duty concession
The temporary land transfer duty concession for off-the-plan apartments, townhouses and units will be extended for an additional six months. The concession will now apply to contracts signed on or after 21 October 2024 and before 21 April 2027 (instead of 21 October 2026).
This temporary concession is available to all purchasers, including investors, companies and trusts. It does not have to be your principal place of residence or first home.
The property must be a lot in a strata subdivision that has common property, such as a shared driveway. This means the concession:
- applies to apartments, units and townhouses
- does not apply to house-and-land packages if they are not part of a strata subdivision.
There is no threshold for this concession. It is available for properties of any value.
Additional road maintenance funding
In 2026-2027, the government plans to spend over $1 billion on fixing potholes and resurfacing roads across the state.
Investment in better public transport
The government will be investing $1.3 billion in trains and services across Victoria, including:
- $674 million for 25 additional 6-car X’Trapolis 2.0 trains for the metropolitan train network
- $318 million for maintenance and safety upgrades that will help the regional passenger rail network run more reliably
- $92 million to improve train services, including to run up to 9 daily services on the Shepparton Line, increase capacity on the Wyndham Vale Line with larger trains, and uplift services along the 6 lines that run through Clifton Hill and Burnley
- $76 million to take the next steps towards electrification of the Melton Line
- $7.5 million to make the public transport network, cycling facilities and walking paths safer and more accessible
There will also be $105 million invested to deliver more buses and ferry services in growing suburbs and regional centres, as well as $76 million to improve the tram network including new and more accessible stops.
Making it easier to get free healthcare
Continuing investment will be put towards the states healthcare system focusing on making it easier and cheaper to get quality healthcare. The budget has committed to:
- $3.9 billion in new health initiatives as part of a $32 billion total health investment in 2026–27
- $2.1 billion to support hospitals and the health workforce, including funding to reduce wait times and improve emergency care
- $567 million for health infrastructure upgrades across the state
- $299 million to support mothers, babies and young families, including expanded maternal and child health services
- $133 million to expand hospital‑level care delivered at home, reducing pressure on emergency departments
- $109 million to deliver 45,000 extra paediatric specialist appointments and 4,000 additional planned surgeries for children
- $2.3 million to strengthen school immunisation programs
- $10 million to keep Victoria’s state-funded urgent care clinics running
Childhood Education
The government is continuing to invest in childhood education across the state.
Kinder & childcare facilities:
- $201 million for up to 22 new kindergartens on or near public school sites
- $180 million in grants to deliver 27 new/expanded kindergartens and childcare centres
- $71 million for 5 government owned early learning Victoria centres in high demand locations
- $9.8 million for grants to improve and upgrade early childhood infrastructure
Schools:
- $420 million to build 4 brand new schools and campuses
- $552 million for school building maintenance and compliance, delivering high-quality spaces for learning, including to make school buildings more accessible for students and staff with disabilities.
- $295 million to upgrade 31 schools across Victoria, including upgrades to visual and performing arts spaces, sports facilities and learning spaces.
- $217 million for modular classrooms to provide flexible spaces
- $104 million to acquire land for new schools and new campuses, including in Cardinia, Greater Geelong, Melbourne, Hume, Mitchell and Wyndham.
- $25 million for minor works such as upgrading bathrooms and fixing roofs.
- $22 million to begin planning for future new schools.
Payroll tax thresholds – non-government schools
The Government has brought forward a review of the income per student threshold for the non-government schools payroll tax exemption and will align the threshold with the Schooling Resource Standard (SRS) going forward.
From 1 July 2026, non-government schools with an income per student up to $16,397 will be exempt from payroll tax. The income per student threshold will increase each year in line with the SRS amount for secondary students determined and published by the Commonwealth Government.
Eligibility for the payroll tax exemption for non-government schools will continue to be assessed against the latest available income per student data and the revised threshold.
For businesses more broadly, payroll tax settings remain unchanged in Victoria, with the general payroll tax rate and threshold continuing at 4.85% on wages above $1.0 million.
Regional Victoria
In addition to the above measures, there were some key announcements made that were focused on regional Victoria:
Regional education:
- Investing an additional $112 million in regional education
- Providing $95 million to upgrade 9 schools across regional Victoria, including:
- Ararat Primary School
- Bacchus Marsh College
- Daylesford Primary College
- Eaglehawk Primary School
- Maryborough Education Centre
- Stawell Primary School
- Surfside Primary School
- Warragul North Primary School
- Yarrawonga College P-12.
Regional healthcare:
- $75 million for the Regional Health Infrastructure Fund to renew and upgrade infrastructure across rural and regional health services.
- $10 million to meet growing demand for Hospital in the Home beds operated by Barwon Health.
- $7.1 million to operate the new PET scanner at Goulburn Valley Health.
- $4.2 million to continue group-based parenting supports for parents whose children are being treated for mental illness across 8 regional Infant, Child and Youth Area Mental Health and Wellbeing Services.
- $1.1 million to prevent chronic disease through the Health Loddon Campaspe program
- $985,000 to continue mental health services and supports in regional and rural communities, including the Q*Space and Be Well in the Ranges programs.
Regional transport:
Investing a further $481 million in regional transport services, including:
- $318 million for upgrades that will reduce delays and improve reliability on the regional rail passenger rail network.
- $127 million to improve regional freight rail infrastructure across Victoria to support the efficient movement of goods and fewer trucks on regional roads.
- $30 million for even more train services on the Shepparton line.
- $3.9 million to continue passenger services on the Portarlington Ferry.
- $2 million for V/Line to improve safety at Ballarat, Little River Station and Beaufort stations through CCTV improvements.
If you would like to discuss how recent budget announcements may affect your business or investment decisions, please reach out to your Matthews Steer advisor or Contact us to be put in touch with the right person for your needs.
May 2026 — Michael Ross