Victoria state budget 2026: state back in black forecasting two back-to-back surpluses

Victoria is back in black for the first time since the start of the pandemic, with Tuesday’s state budget to deliver an operating surplus and forecasting another next financial year. The 2026-27 budget, to be handed down on Tuesday afternoon, will show the state recorded a $700m surplus in 2025-26, largely in line with December’s pre-budget update of $710m and an improvement on the $611m forecast last May . It marks Victoria’s first surplus since before the Covid-19 pandemic in 2018-19, when the state’s finances were $1bn in the black. The treasurer, Jaclyn Symes, has also projected a $1bn surplus in 2026-27, down by $943m on December’s forecast. The government has said the budget – its final before the November state election – would show average surpluses of $1.7bn projected across the forward estimates period. “Labor’s budget is in surplus while continuing to invest in the frontline services Victorians rely on,” Symes said in a statement. “Jess Wilson’s Liberals will do what they always do – they will cut funding, close hospitals and sack workers.” However, like other states, Victoria’s headline operating surplus does not include infrastructure and other capital spending. The government did not release the figures that include this spending before Tuesday’s budget, but the December update had estimated a cash deficit of $9.68bn in 2025-26, decreasing to $7.3bn in 2026-27 and $6.8bn in 2027-28 before widening again to $8.1bn in 2028-29. …