Victoria to rewrite Sentencing Act as next year’s surplus takes a hit

Victoria is forecasting a slashed surplus, rising debt and steeper interest bills, as Labor commits to an election year overhaul of the state’s sentencing laws.

Tuesday’s state budget, which will also extend stamp duty discounts, will forecast a surplus for the next financial year of $1 billion – $900 million less than predicted in December.

Figures provided to The Age by the government forecast Victoria will record its first surplus since the pandemic, at more than $700 million for 2025-26. The figure is predicted to grow to $1 billion in 2026-27.

The state did not provide figures for the remaining budget years but said surpluses would average $1.7 billion over the forward estimates out to 2030.

Victoria’s net debt was forecast to reach $192 billion by 2028-29 in the latest update released in December. A higher figure is expected in 2029-30.

“Labor’s budget is in surplus while continuing to invest in the frontline services Victorians rely on,” Treasurer Jaclyn Symes told The Age.

The $900 million revision to the 2026-27 surplus comes after a flurry of spending announcements over the past month, including $432 million to extend free public transport until the end of May and introduce half-price fares for the rest of 2026.

Premier Jacinta Allan said the state could afford cost-of-living relief because it was still delivering operating surpluses and the economy was growing.

Operating results do not include capital expenditure, such as roads and hospitals.

Victoria is expected to spend over $10 billion more than the revenue it generates this year, once infrastructure projects that can be financed by debt are allowed for.

The pre-election budget will also allocate $3 million for an independent review of the Sentencing Act that underpins the penalties handed down by courts, a sign that crime is still on voters’ minds despite the government’s “adult time for violent crime” policies aimed at cracking down on young offenders.

Although sentencing laws have been reviewed before, the government says this is the first comprehensive review of the entire act since it was first legislated in 1991.

The Sentencing Advisory Council will conduct the review and be tasked with ensuring the laws are clear, more consistent and in line with community expectations.

Advice will include whether the act meets 21st-century expectations and how sentencing can better interact with victims of crime.

The council will also be asked to spend time on specific issues causing concern, including penalties for those who harm people trying to provide assistance, known as Good Samaritan laws.

“Sentencing absolutely needs to reflect community expectations – but the act hasn’t been reviewed with that aim in mind since 1991,” Attorney-General Sonya Kilkenny said.

“It’s no wonder many Victorians think sentencing doesn’t reflect our modern challenges. We’ll rewrite the act following the advice from experts, police and the public, because under Labor, community safety comes first,” she said.

Once the review is completed, the government will rewrite the act. The process is focused on longer-term changes and will not prevent the state from making urgent changes to justice laws when needed.

Separate to this work, the Victorian Law Reform Commission will be asked to provide advice on the state’s laws protecting emergency workers, following another attack on a paramedic last week.

Tuesday’s budget will also extend a discount on stamp duty for Victorians buying off-the-plan apartments, units and townhouses for another six months, at a cost of $32.7 million.

The discount was due to expire in October, two years after it was announced, but it will now apply for contracts signed before April 21, 2027.

Under the scheme, buyers can deduct the cost of construction from the total value of their property, which is used to determine stamp duty.

A $620,000 purchase of an apartment expected to cost $465,000 to build would be assessed at $155,000. This would reduce stamp duty to $4000 and create a saving of $28,000. Savings will depend on how much construction takes place on or after the contract date.

A property that is half-complete will incur stamp duty on the value already finished, but a buyer can receive the concession for the other half. An apartment that hasn’t started will be able to access the full cut.

Kilkenny, who is also planning minister, said the extension would maintain momentum for the creation of new homes.

“Labor is delivering a tax cut for home buyers. Do the Liberals support it, or will they cut it?” she said.

Opposition Leader Jess Wilson said on Monday that the operating surplus did not consider the true spending in the budget.

“It’s all well and good for the premier and the treasurer to stand up and talk about a $700 million operating surplus, but it does nothing to manage the debt bomb that is running under this government,” she said.

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