Victorian budget 2021: state pledges to massively outspend commonwealth on mental health

The Victorian government has promised to massively outspend the federal government on mental health services, committing $3.8bn over the next four years – 65% more than the federal government announced in its mental health investment last week.

It’s part of a big-spending budget that also includes spending more than $10bn over the next four years on infrastructure including schools and hospitals, designed to drive Victoria’s economic recovery after the state bore the brunt of the impact from the Covid-19 pandemic.

The spending is powered by a rapidly recovering economy with gross state product expected to increase 6.5% in 2021-2022.

But the budget papers say that recovery has so far been entirely driven by government spending, and warn that a protracted global recovery from Covid-19, and drawn out vaccine rollout, could cause further economic shocks.

And they set out a plan to increase stamp duty and land taxes on properties worth more than $2m and $1.8m respectively, and to introduce a new windfall gains land tax to capture up to 50% of the profits from developers benefiting from government rezoning decisions.

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