The Victorian Budget: A Deeper Perspective

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The Victorian Budget 2018/19, delivered on Tuesday 1 May 2018, once again provides many new opportunities for businesses wanting to do work with government. Here is our annual breakdown and tips of where the key opportunities lie for businesses large and small – and how to find them.

The Victorian Budget 2018/19 is entitled Getting Things Done – and certainly in some sectors the Budget achieves this.

Construction, transport and TAFEs are again the big winners; however, these very large expenditure items do create flow-on opportunities for many businesses wanting to work with Government, outside of the construction and infrastructure sectors. The Victorian Budget also includes considerable expenditure on health, including mental health, and community programs. In addition, hidden in budget line items are a number of technology initiatives.

In this blog I break down high-level expenditure items against sectors, where budget items require industry to support their delivery through products or services. I do not address broad policy commitments.

We have also once again completed an in-depth analysis of the Victorian Budget 2018/19 by department, and then by sectoral discipline, in our Budget Analysis and Review Tool (BART), available for download. BART features each budget initiative from Budget Paper #3 collated into easy-to-read graphs in Microsoft Excel.

Tips:

  • Any business serious about winning government work must be familiar with both the Victorian Budget and Federal Budget – particularly in an election year, when there will be pressure for each Government to fulfil its current and past year’s Budget commitments.
  • Review each budget initiative critically, not just at the headline level, but also the description provided in the budget papers – in particular Budget Papers #3 and #4 which describe each budget initiative in quite some detail.
  • Question the related services supporting each asset or service to identify unstated opportunities. Don’t dismiss a high-value project because of your size, or because you may not operate in that space. Take the $462M budgeted redevelopment of the Ballarat Base Hospital as an example. In addition to project management and construction, a project of this size may require input from many other sectors, including environmental consulting, landscaping, furniture, electrical works, painting, plumbing, retail opportunities, medical equipment, technology and consulting.
  • Review Budget Paper #4 to understand budget items across the government sector, not just the seven departments. The Victorian Government alone comprises hundreds of agencies, and their planned expenditure items greater than $1M are all listed in this budget paper. Some are also listed in this blog.

Reading the Budget

Following the Budget Overview, the Victorian Budget comes in five Budget Papers:

Budget Paper #1: Treasurer’s Speech

Budget Paper #2: Strategy and Outlook

Outlines the state’s current and expected economic and financial performance, and outlines the Government’s fiscal and economic strategy.

Budget Paper #3: Service Delivery

Provides an overview of the goods and services funded by the Government as outputs and assets. This paper also provides a high-level explanation of each budget item.

Budget Paper #4: State Capital Program

Describes the Victorian Government’s asset investment program in terms of new projects (funding allocated in this 2018/19 budget) and existing projects (begun in previous years).

Budget Paper #5: Statement of Finances

Provides the financial details of the aggregated Victorian general government sector and the broader public sector.

Two key terms are used in these papers:

  1. Output – where Government is spending money on something the Government doesn’t own, such as a grant or an expense, and
  2. Asset – where Government is spending money on something the Government will own, which becomes an asset.

EXPENDITURE ITEMS AGAINST SECTORS

Agriculture, exports and tourism

Standout initiatives include:

  • $51.1M for tourism marketing, and
  • $16.1M for the Government to enhance access to key export markets for Victorian agricultural products. This includes improving product integrity and safety systems along the supply chain, the phylloxera monitoring program, implementing the Victorian Wine Industry Development Strategy and development of the artisanal food sector.

The Victorian Budget contains many other initiatives in support of the agricultural sector.

Environment

The Budget contains many opportunities for businesses specialising in various types of environmental consulting.

Through Parks Victoria, the Department of Environment, Land, Water and Planning, and the many water authorities there are many initiatives, including the following:

  • $3M for ‘caring for our environment’ – Faunal emblems
  • $1.3M for ‘caring for our environment’ – Tackling weeds and pests
  • $7.9M for clean-up of contaminated public land
  • $38.8M for the management of Public Land and Forests
  • $2.1M for improving the Olinda Precinct, where funding will be provided to transform the former Olinda golf course site into public parklands to provide local residents and visitors with recreational and sporting opportunities.

Businesses operating in environmental consulting, landscaping, vegetation and related services should also look closely at the many roads, transport and building projects that will all require environmental assessments, natural heritage assessments, native title assessments etc.

Health and Human Services

Much funding in health has focused on hospital redevelopments, health centre buildings and the new Joan Kirner Hospital to be built in the western Melbourne suburb of Sunshine.

Other initiatives within the health and human services portfolio include:

  • $4.6M in biomedical research funding helping to commercialise Victoria’s biomedical research into local jobs and industry
  • $5M funding for the continued implementation of initiatives under the Industry Plan for Family Violence Protection and Response. This is a coordinated 10-year plan for the workforces that prevent and respond to family violence. It includes training, leadership, digital technologies, information sharing, capability frameworks for prevention and response, risk management, and initiatives that relate to the continued support of safety hubs and the Centre for Workforce Excellence established in 2017.
  • $12M for clinical technology refresh, where the technical infrastructure required to support and deliver patient‑related services (such as diagnostic imaging, patient management systems and electronic medical records) will be upgraded. This will improve operational stability of the delivery of information related to the patient, including diagnostics and other clinical services to the point‑of‑care.
  • $123.8M for Electronic Medical Records in Parkville, encompassing the Royal Melbourne Hospital, Peter MacCallum Cancer Centre and Royal Women’s Hospital. This will enhance patient safety through improved clinical decision support and medication management.

Infrastructure

In 2018-19, a total of $78.9 billion of state capital projects are commencing or underway. This includes major investments such as:

  • the Metro Tunnel, the Level Crossing Removal Program, new X’Trapolis trains and High Capacity Metro Trains
  • the CityLink–Tulla widening, the West Gate Tunnel Project (including the Monash Freeway upgrade), and the Western Roads upgrade
  • The upgrade of many suburban roads
  • the regional rail infrastructure and operations
  • the new Joan Kirner Women’s and Children’s Hospital, Stage 2 of the Bendigo Hospital Redevelopment (including commercial development), and other major hospital redevelopments
  • Melbourne Park redevelopment
  • Stage 2 of the Melbourne Exhibition and Convention Centre redevelopment, and
  • $2.5 billion for new schools builds and school upgrade programs.

Any business interested in any aspect of the delivery of these projects, including associated services, should review Budget Paper #4: State Capital Program for further information, including prime contractor details, funding and delivery timeframes.

Small Business Victoria

The Government has allocated $13.5M in budget funding to provide ongoing industry-led workshops, mentoring programs, regional roadshows and digital roadshows.

Businesses expert in providing advice and support to other businesses should understand current Small Business Victoria programs and opportunities for them to contribute to these programs.

Technology

The 2018-2019 Victorian Budget is once-again low on technology spend, in particular within the seven Victorian Government departments. Interestingly, many other government agencies, including water authorities, are continuing to fund larger ICT projects, including ERPs, business intelligence solutions and customer management solutions.

New budgeted initiatives include:

  • $9.1M funding to the Country Fire Authority for its emergency services high-priority infrastructure program (state wide)
  • $5.4M to the Metropolitan Fire Brigade (MFB) for the upgrade/replacement of computer equipment and software (building on previous year’s upgrade funding)
  • $8.7M to the MFB for Mobile Command and Control Infrastructure
  • $5M to the MFB for SAP Stability and Security – Stage 2
  • $3.4M to the Victorian Ports Corporation for Information technology – upgrades and development
  • $43.4M allocated to child information sharing reforms, where prescribed entities will appropriately share information. These reforms will improve early identification of issues and risks to enable early support for children and families, increase collaboration between services to provide an integrated response, and support children’s participation in services.
  • $17.6M to the Department of Premier and Cabinet to implement the Government’s Cyber Security Strategy to improve detection and prevention capabilities, and responses to cyber‑attacks on Victorian Government IT systems.
  • $14M allocated to the Victoria Centre for Data Insights and the Behavioural Insights Unit. These functions will develop public sector capability to address policy problems by investing in evidence‑based data analytics. This will reduce the need for externally contracted expertise, as well as improve the effectiveness and reduce the cost of capability development initiatives.
  • More than $60M in funding over three years will be provided to the State Revenue Office to continue and expand its work across several compliance programs, plus implement technologies to enhance compliance. The State Revenue Office compliance programs and digital initiatives will contribute to the creation of new jobs in regional Victoria.
  • $11M mobile project to build extra telecommunications infrastructure and improve mobile coverage across black spots in regional Victoria.
  • $3.5M for the renewal and upgrade of the Intelligent Traffic System (roads)
  • $2.8M for tram automatic vehicle monitoring system, and
  • $17M for the Digital Assessment Library, comprising new digital student assessment tools.

Budget status of 2017 Technology programs

For completeness, and in response to commentary on the lower funding of technology projects, I thought it was useful to include a table outlining some of the 2018/19 and 2019/20 budgeted expenditure on technology programs. Any budget should be considered in the context of previous budgets and how existing initiatives continue to be funded or upgraded.

Public Sector Capability Development

The 2018-2019 Victorian Budget also contains a number of initiatives aimed at ongoing public sector reform and capability uplift, including:

  • $1M allocated to the Department of Treasury and Finance for Procurement Reform.
    A social procurement framework will be implemented to achieve better value from government spending and work will be undertaken to streamline the administration and governance of Victoria’s procurement arrangements. Investment in technology will enable reporting on the outcomes of the social procurement framework and reduce the burden of red tape.
  • $1.6M for the Office of Projects Victoria to establish a Victorian Major Projects Leadership Academy to build project management and technical capabilities that support delivery of Victoria’s major infrastructure projects.
  • $5M investment in government procurement to drive jobs managed through the Office of Industry Participation and jobs within DEDJTR.
  • $7M to improve the effectiveness and responsiveness of the Office of the Victorian Information Commissioner in relation to freedom of information (FOI), privacy and data protection. This includes redeveloping business processes, preparing privacy guidance materials, improving stakeholder management, and providing FOI and privacy education and training.
  • $27.9M in additional funding for the Victorian Public Service Commission to implement its Strategic Plan 2017‑20. This includes improving integrity and governance in the public service, continuing the Victorian Leadership Academy, undertaking workforce planning, developing diversity employment strategies, and improving the mobility and flexibility of public service employees. These activities will enhance the Victorian public sector’s capability to deliver high-quality services to the community.
  • $19.9M in additional funding to bring the Environment Protection Agency into the modern era.

Grants

Grants Victoria provides a one-stop shop for all Victorian Government grants. What follows are budget allocations to existing grants and the creation of new grants.

Remember, grants are a primary vehicle for Government to deliver against a policy initiative, so demonstrating achievement of that policy – and in a short time frame – are key evaluation criteria.

  • A further $10M invested to boost the Premier’s Jobs and Investment Fund to develop practical ideas that strengthen Victoria’s economy and grow Victorian jobs.
  • $50M to the Regional Health Infrastructure Fund for allocation across regional Victoria to continue the upgrade of rural and regional health facilities.
  • $25M for the Better Care Victoria Innovation Fund to enable continued investment in public hospital‑led improvement and innovation projects to enhance access to services and improve health service quality and performance.
  • $10M additional funding for the Statewide Volunteer Support Package, which provides training and development grants for volunteers in organisations such as the Victorian State Emergency Service, Australian Volunteer Coastguard Association and Life Saving Victoria.
  • A new community building fund, Pick My Project. Victorians will have the opportunity to apply for funding for local community‑building projects, which will then be chosen via online public vote in their region. In addition to grants funding, the initiative also includes the development of the online platform and the operation of the program.

For an even more detailed breakdown and analysis of the 2018-2019 Victorian Budget Paper #3, don’t forget to download our Budget Analysis and Review Tool (BART).

BART comprises spreadsheets that re-present the output and asset initiatives tables taken from Budget Paper #3. This allows you to perform your own analysis and review using the many sort, summation and collation tools within Microsoft Excel.

This information will help businesses to engage and support the government to fulfil its budget initiatives. Businesses need to understand the policy direction that has been set by the budget and how the service initiatives will fulfil these policies. It’s also important that you first target the department or agency, or portfolio you want to work in. Once you have targeted this you can read the initiatives in the relevant table.

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