Upping Victoria's windfall gains tax on developers could raise billions of dollars to funnel into cost-of-living relief measures.
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As he prepares to hand down his 10th state budget on Tuesday, Treasurer Tim Pallas has been urged to make a late addition by increasing the state's windfall gains tax on developers.
From July 2023, the tax has applied to all land subject to a government rezoning that subsequently increases its value by more than $100,000.
The tax rate varies from 62.5 per cent for uplifts above $100,000 and 50 per cent for uplifts equal to $500,000 or more.
Victoria's Parliamentary Budget Office, on request from former state Greens leader Samantha Ratnam, has calculated that lifting the levy rate on developers to 75 per cent would raise $8.2 billion by mid-2028.
The Greens argue increasing the tax could make a real difference to millions of Victorians doing it tough, paving the way for more investment in affordable housing, healthcare, energy and public transport.
"The cost of living is continuing to skyrocket, and too many people are struggling to pay for rent, bills, and groceries," the party's treasury spokesman Sam Hibbins said.
"But instead of helping, the government is planning a budget full of unnecessary cuts that will make people worse off."
A further $6.5 billion could be raised over the next four years through the Greens' proposed levies on big banks ($5.3 billion), developers ($762 million) and online gambling ($605 million), analysis from the parliamentary budget office shows.
Mr Pallas was talking down the prospect of going after developers in Tuesday's state budget.
"It's not our intention to increase the burden either on developers or on business in the context of this budget," he said on Thursday.
A budget update released in December showed Victoria's net debt was expected to climb to $177.8 billion by June 2027, $6.4 billion higher than the estimate from May 2023.
Expenditure implemented at the peak of the COVID-19 crisis will continue to be wound back and government infrastructure spending eased to provide "breathing space" for the private sector to build housing, the treasurer said.
Mr Pallas said Premier Jacinta Allan had made it clear to him she did not want the state budget to adversely affect households as families face higher cost-of-living pressures.
Australian Associated Press
