Victorian households, businesses to cop $2.5b more in taxes to drive down debt

Households and businesses in Melbourne will bear the brunt of Victorian Treasurer Tim Pallas' latest efforts to get the state budget out of the red.

Despite insisting that the books look good and the state's economic future is secure, Pallas' mid-year update revealed a worsening deficit from $2.2 billion to $3.6 billion in 2024-25.

Debt is still tracking to pass $187 billion in 2027-28.

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As a result, Pallas has announced increased and expanded taxes to bring in an extra $2.5 billion over the next four years.

"As a government, we need to have the resources to keep people safe and secure," Pallas said.

But the move has sparked criticisms.

"They've got a problem of their own making and they're making it Victorian's problem," shadow treasurer Brad Rowswell said.

The biggest hit is through the fire services levy paid by every property owner at council rates time.

"We will be replacing that levy with the emergency services and volunteers fund," Emergency Services Minister Jaclyn Symes said.

That rebrand is hoped to create funding certainty for the SES, Triple Zero Victoria, Emergency Recovery Victoria, State Control Centre and Fire Forest Management Victoria.

"This is a fund I think Victorians will get behind," Symes said.

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The existing levy brings in about $1 billion a year.

Every property owner in the state will now be expected to pay even more, adding up to an extra $2.1 billion over the coming years.

But Pallas downplayed the sting.

"It'll be about $60 a year, about $1.20 a week," he said.

"So a cup of coffee a month basically."

Rowswell said Pallas was "absolutely and totally" out of touch.

"Measuring the hardship of Victorians by the way of lattes. I mean, come on, can you think of anything more out of touch," he said.

Pallas is also increasing the congestion levy on car parks and axing the $100 rego discount for EV owners.

"We should have a govt that can manage money and not impose more and more on households and businesses," Opposition Leader John Pesutto said.

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