Nearly $2 billion will be spent to tackle family violence in Victoria, with the state's public sector being told to find savings, with possible job cuts, to pay for the investment.
The "unprecedented" investment in countering family violence is the centrepiece of Treasurer Tim Pallas' third budget and prepares the state for an election year spending spree with a surplus of $1.2 billion and a total of $8.3 billion in surpluses over the next four years.
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Victorian budget 2017: Tough on crime
The centrepiece of this year's budget was investment in domestic violence protection. Crime reporter Nino Bucci explains.
As Mr Pallas delivered his budget on Spring Street, Prime Minister Malcolm Turnbull announced major changes to school funding. Tuesday's state budget committed Victoria to its share of the fifth year of the original Gonski funding agreement, but funding beyond 2018 remains unknown.
The budget includes many policies already announced by Premier Daniel Andrews' government, including $2 billion for more than 2700 extra police and a continued focus on road and rail projects.
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But there is also $311 million to buy 39 new V/line trains and $218 million for 10 trams to offset the crush loading on the key commuter lines from politically sensitive regional cities such as Geelong and Ballarat.
The state and federal governments will split costs to fund a $673 million widening of the ring road between Altona and Greensborough.
While Labor makes efforts to improve housing affordability, Melbourne's booming property market continues to provide steady cash flow to state coffers, with stamp duty rising 2.4 per cent to $6.1 billion this year and growing to $7.5 billion in four years' time.
The government is also banking on making an extra $840 million over the next four years by changing the off-the-plan stamp duty concession to restrict it to those who will make the home their principal place of residence or who qualify for the first home buyer stamp duty exemption.
Mr Pallas forecasts Victoria's GST share will increase from 91¢ in the dollar this year to 98¢ in four years' time, as population grows at record levels and with the state complaining of being short-changed by the Turnbull government on infrastructure.
In 2017-18 the state's GST allocation is expected to rise 8 per cent to $14.7 billion.
In response to the royal commission, Mr Pallas has allocated $1.9 billion to tackle family violence, including setting up 17 "support and safety hubs" to provide information, triage and access services for victims, as well as other programs including more housing.
However, the majority of the hubs will not be in operation until 2020.
Photo: Penny Stephens
"This government won't turn its back on these people, these women and children," Mr Pallas said.
Despite the unprecedented family violence package and funding for new police, Opposition Leader Matthew Guy claimed there was "not one new cent" in the budget to make Victoria a safer place.
"This budget does nothing to crack down on a crime rate that is sweeping Victoria," Mr Guy said. "It is a budget of missed opportunity to make Victoria safe."
Asked whether he saw family violence as a law and order issue, Mr Guy said: "The whole state is going through a crime wave; I see family violence as one part of that."
At least 40 per cent of police work is related to family violence.
Victoria's growing public sector will be forced to "redirect" resources to tackle family violence, Mr Pallas said, after the government had made the decision not to impose a levy on taxpayers to fund domestic violence plans.
It will be forced to make $1.3 billion of savings, said Mr Pallas, who refused to rule out job cuts. "There will be some pain associated with this," he said.
The savings push comes as public sector wages increased by $1 billion this year on the back of the promised police recruitment drive and the growth of hospital and health services. In four years' time the bill for public servants' wages is expected to hit $25.3 billion.
Labor has moved to boost investment in the regions, with 750 public service jobs going to Ballarat and the Latrobe Valley and a 25 per cent payroll tax discount for those that employee at least 85 per cent of their staff from outside Melbourne.
But as Mr Pallas outlined the regional boost, news broke that 240 jobs in regional Victoria would be lost at two Murray Goulburn milk processing plants.
The Andrews government has come under considerable pressure for breaking a pre-election promise not to raise taxes, yet the budget outlines an increase to car stamp duty to $8.40 per $200.
And with a national focus on gas supply, Victoria is upping its efforts to assess onshore and offshore gas reserves during the moratorium on onshore conventional gas.
Resources Minister Wade Noonan said $42.5 million would be spent over the next four years – the life of the moratorium – to include scientific, environmental and economic studies to assess the potential benefits and risks of onshore gas exploration in Victoria
Mr Noonan has written to the Turnbull government – which has been strongly critical of Victoria's fracking ban and moratorium – asking for a contribution to the studies to assess the state's gas reserves.
Debt is just 4.6 per cent this year but is forecast to rise in coming years to 5.8 per cent. Mr Pallas reiterated Labor was prepared to borrow, saying what was the point of having a AAA credit rating if you did not borrow at good rates.