Victorian fire services levy to double as state deficit grows by $1.4b

But other types of properties will be hit even harder. Commercial properties will pay $492 more on average while primary producers such as farmers will pay more than double, rising from $621 to $1299.

On the website outlining the changes, the government says every dollar raised will go towards “vital life-saving equipment, vehicles, staff, training for volunteers, community education, and recovery support for when Victorians need it most”.

“Variable rates will be higher under the ESVF than the FSPL [fire services levy] to account for the ESVF’s larger scope.”

Treasurer Tim Pallas also confirmed that the state’s congestion levy, a tax on private and public car park operators around the inner city, would be expanded and rise in line with a similar charge in Sydney.

The charge on category 1 areas, which include Melbourne CBD, Southbank, Domain, Docklands and East Melbourne, will go up from $1690 to $3030. The category 2 zone will be expanded to include inner-eastern suburbs along Hoddle Street and Punt Road that are not currently subject to the levy. They include areas in Richmond, Prahran and South Yarra.

The costs are passed directly on to consumers who use the car parks.

From January 1, 2026, zero and low-emission vehicles will also no longer receive a $100 discount on their registration. By 2027-28 this is expected to bring an extra $93 million into the state’s coffers.

The mid-year budget update, released on Friday, reported Victoria’s deficit, forecast in May for the 2024-25 financial year at $2.2 billion, has grown to $3.6 billion.

However, the document says the budget is still on track to record an operating surplus in 2025-26, and is forecasting a $100 million improvement, with a surplus of $1.6 billion.

Speaking on Friday, Pallas denied that the changes to levies were designed to protect his budget surplus, pointing to more frequent natural disasters straining resources and a need to reduce car dependence while making congestion charges fairer.

He said the emergency services levy would cost the typical household about $60 a year extra or a “cup of coffee a month”.

“Victoria is now seeing net debt as a proportion of the economy fall for the first time since 2017 in this budget update,” Pallas said.

“Net debt and net debt as a proportion of the economy are improved … Overall, net debt is down again now to 25 per cent of the size of the economy by the end of the estimates.”

Net debt is now forecast to be $187.3 billion in 2028, an improvement of $500 million.

This financial year, net debt will be $155.2 billion, compared with a budget forecast of $156.2 billion.

Shadow Treasurer Brad Rowswell said Pallas’ comments about the cost of a cup of coffee showed a failure to grasp the cost-of-living pressures being faced by Victorians.

“If you can’t understand that, it’s time to go, it is the biggest issue facing Victorians at the minute,” he said.

“Victoria still has the highest debt of any state in the country … even New South Wales has $48 billion of debt less than Victoria does.”

The fire levy changes came as Emergency Services Minister Jaclyn Symes announced a funding boost of more than $250 million for the Country Fire Authority and the state emergency services, including $70 million to replace trucks, tankers and pumpers.

Symes said the changes to the levy would require legislation, with the intention it would take effect by July 2025.

“I’m hoping that other political parties will see the benefit in the support that this brings to Victorians and emergency service volunteers,” she said.

“Communities are asking more of their local SES volunteers than they ever have before, which is why we’re giving them more funding, new trucks and the latest technology.

“Our emergency services put their lives on the line without a second thought. This package is about making sure they have what they need to keep all of us safe.”