Victorian budget adds a Covid tax for 860,000 as Daniel Andrews faces a debt crisis

860,000 Victorians to pay Covid tax of up to $1,300 as Dan Andrews faces financial Armageddon: Horror budget also slugs big business as Victoria suffers consequences of world’s harshest lockdowns

  •  Victorian Budget disaster will be paid for by landlords and business
  •  Daniel Andrews brings in new taxes 
  • No end in sight to the spiraling debt

Thousands of large businesses and landlords will foot most of Victoria’s COVID-19 debt bill under a $31.5 billion state budget repayment plan.

The 2023/24 Victorian budget, handed down by Treasurer Tim Pallas on Tuesday, detailed a 10-year COVID debt levy as part of a three-pronged strategy.

The $8.6b levy will firstly target the top five per cent of businesses with national payrolls above $10 million but include exemptions for hospitals and charities.

Victoria’s tax-free threshold for general land tax will be lowered and a fixed charge added for those who own multiple properties under the second part of the levy.

Mr Pallas said about 860,000 Victorian landlords, people with holiday homes and commercial property owners will be affected.

Daniel Andrews (right) speaks with journalist’s at the Budget Lockup 

An average landlord with $650,000 of land holdings would pay $1,300 a year as part of the levy, which is expected to collectively raise $8.6b over the forward estimates.

‘It’s fair that Victorians with multiple properties make a modest contribution to repaying COVID debt,’ Mr Pallas said.

Family homes won’t be impacted by the changes.

Other elements of the strategy are returning the size of Victoria’s public service back to pre-pandemic levels and growing the previously announced $10b Future Fund, including legislating it to ensure it can only be used for debt reduction.

Victorians with an investment property face paying $1,300 a year for the next decade (holiday town of Portsea above)

Victorians with an investment property face paying $1,300 a year for the next decade (holiday town of Portsea above)

About 3,000 to 4,000 public sector workers are expected to be affected by the cuts but frontline workers will be spared.

The public service staff bill is projected to rise from $35.3b next financial year to $38.3b for the 2026/27 financial year due to increasing wage costs.

Victoria spent $10.7b on health and $11b on business support through the pandemic, with Mr Pallas branding the debt-busting measures temporary and targeted.

‘We’re ensuring that while our kids will of course have memories of the trauma that was the COVID years, they won’t have to necessarily be paying for that trauma for the rest of their lives and for future generations,’ he said.

Businesses with payrolls of more than $10 million will also be hit with a levy

Businesses with payrolls of more than $10 million will also be hit with a levy 

Daniel Andrews has blamed Covid for the

Daniel Andrews has blamed Covid for the 

Victorian Treasurer Tim Pallas manages to smile ahead of horror budget

Victorian Treasurer Tim Pallas manages to smile ahead of horror budget 

The 2023/24 budget forecasts Victoria will post a $1b surplus in two years – $100m more than predicted before the November state election – and another of $1.2b for 2026/27.

Net debt is expected to hit $135.4b at the end of the next financial year before rising to $171.4b by mid-2027, equating to 24.5 per cent of gross state product.

Stamp duty will be scrapped for commercial and industrial properties from mid-2024 and be replaced with an annual property tax of one per cent of the property’s unimproved land value.

Annual interest repayments are tipped to grow to nearly $8b over the forward estimates and tax revenue is projected to rise more than 20 per cent to 40.4b.

Commercial and industrial properties will transition to the new system once sold and the property tax will be paid yearly from 10 years after the transaction.

Reducing and eventually abolishing business insurance duty, increasing the payroll tax-free threshold from $700,000 to $900,000, and removing the payroll tax exemption for high-fee private schools are among other new measures.

The latter will mean about 110 schools lose their tax-free exemption.

Victorian Government spending 


* $320 million for the hospital infrastructure delivery fund for works at seven hospitals

* $162m to build three new residential facilities in Cohuna, Maffra and Numurkah

* $44m for eight new PET scanners

* $30m for a new ambulance station at Armstrong Creek

* $23.8m for women’s health, including 20 new women’s health clinics

* $12m for mRNA Victoria to deliver manufacturing facilities in the state


* $7.1m to support councils and Emergency Recovery Victoria in undertaking secondary flood impact assessments

* $500,000 for early intervention and psychological services for communities impacted by floods


* $2.1 billion to upgrade, maintain and build schools across the state

* $1.7b for kindergarten reforms, including free kinder and 100 new centres

* $205m to support and develop the state’s teachers

* $169m for school camps, excursions and sporting trips


* $100.5m to get the Metro Tunnel ready for its 2025 opening date

* $41.1m for cheaper public transport fares in the regions

* $54.6m to maintain the regional rail network

* $30m for road maintenance and renewal works across the state

* $9m to upgrade the Melton train line


* $117.4m to improve Ambulance Victoria’s capacity to respond to growing demand

* $40m for Forest Fire Management Victoria

* $34m to upgrade facilities including fire stations and Life Saving Victoria facilities

* $2m to support reform of the Emergency Services Telecommunications Authority


* $21.9m to prepare the First Peoples’ Assembly and the state for treaty negotiations

* $20.9m for reforms to reduce Aboriginal over-representation in child protection and family services

* $3.7m to enable traditional owner participation in recognition and settlement agreements with the state


* $74.5m to prevent and address gambling harm

* $36m to maintain and secure the Western Plains Correctional Centre

* $7.8m for specialist family violence legal assistance at court

* $4.5m for preventing youth offending through early intervention

As well, the absentee owner surcharge rate will rise from two per cent to four per cent and Victoria’s wagering and betting tax rate will increase from 10 per cent to 15 per cent from mid-2024, almost doubling revenue for the state’s racing industry.

Victoria’s horror budget forecasts

Net operating result: $4 billion deficit in 2023/24, $1.2b surplus in 2026/27

Revenue: $89.3b in 2023/24, $99.9b in 2026/27

Total expenditure: $93.3b in 2023/24

Net debt: $135.4b in 2023/24, $171.4b in 2026/27

Interest repayments: $5.6b in 2023/24, $8b in 2026/27

Total tax revenue: $35.3b in 2023/24, $40.4b in 2026/27

Land tax revenue: $6.1b in 2023/24

Land transfer duty revenue: $7.4b in 2023/24

Payroll tax revenue: $8b in 2023/24

Mental health levy revenue: $912 million in 2023/24

COVID-19 debt levy: $2b in 2023/24, $2.3b in 2026/27

Gambling tax revenue: $2.6b in 2023/24

Motor vehicle tax revenue: $3.4b in 2023/24

Insurance tax revenue: $2b in 2023/24

Infrastructure investment: $27.1b in 2023/24

Employee expenses: $35.3b in 2023/24

Unemployment: 4.25 per cent in 2023/24

Gross state product: 1.5 per cent increase in 2023/24