2021-22 Victoria State Budget Delivered

The 2021-22 Victoria state budget has been handed down. OTA has prepared a summary of those budget measures most relevant to occupational therapists. Click on the links below to skip to the sections of most interest to you.


"It doesn’t make sense to target employers with a payroll tax hike which will hamstring their ability to create jobs and drive the recovery."

Jennifer Westacott, Chief Executive, Business Council of Australia

The Bottom Line

Victorian Treasurer Tim Pallas has brought down a State Budget notable for massive new spending on mental health, funded by a payroll tax increase for the state’s largest businesses.

The Budget deficit is forecast to be $17.4 billion, significantly less than expected, but overall debt is forecast to reach $156.3 billion by June 2025.

Overall, tax revenue is forecast to rise by $3 billion to $26.6 billion, and by $9 billion over the forward estimates.

Increased property taxes will raise $2.4 billion.

However, to stimulate the property market, the Victorian Government will waive up to 50 per cent of stamp duty on newly built or off-the-plan homes valued at up to $1 million until June 30 next year. Existing homes will be eligible for a 25 per cent waiver.

Business groups and the Federal Government have expressed concern that Victoria’s Labor Government is putting the state’s post pandemic economic recovery at risk by its high-taxing approach to the funding of services.

Moreover, the state’s true fiscal position remains unclear, with the Andrews Government refusing to include major infrastructure projects in its budgetary processes and declining to reveal the extent of expected cost blowouts on some of these projects.

Mental Health

Record funding of $3.8 billion aims to transform the way mental health and wellbeing support is offered in the state.

Noting that the implementation of the recommendations of the Royal Commission into Victoria’s Mental Health System will take a decade or more of reform, the Andrews Government asserts that this funding is the “massive next step” in this process.

Key investments

  • $954 million to deliver community-based care, providing health and wellbeing support for Victorians wherever they live;
  • $370 million to improve access to mental health beds and better acute care for Victorians living with mental illness;
  • $264 million for new local services for adults and older adults – providing early care where people live. This ‘front door’ care includes 20 new local services across Victoria – the first of up to 60 across the state;
  • $196 million to support a dedicated system for infants, children and families;
  • $173 million for suicide prevention and response – to continue support for 13 Hospital Outreach Post-suicidal Engagement (HOPE) sites including four new sites for youth across Victoria; and
  • $116 million to support the mental health and wellbeing of Aboriginal Victorians, including funding for Aboriginal Community Controlled Organisations.

There is an emphasis on services in regional Victoria. Three of the first six ‘front door’ sites will be in regional Victoria – Benalla, Latrobe Valley and Greater Geelong. There will be follow-up care and outreach services at nine new sites – Bairnsdale, Hamilton, Horsham, Echuca, Swan Hill, Wangaratta, Bass Coast, Central Gippsland and West Gippsland.

The last Budget funded more than 9,000 new social housing homes – including 2,000 for Victorians living with mental illness. This Budget reinforces those homes with wraparound mental health support, at a cost of $46 million.


The package also invests $206 million to build the state’s mental health workforce – including more mental health nurses, doctors, allied health professionals and support staff.

Together, these investments will support around 3,000 new jobs, aimed at ensuring more Victorians are getting the care they need.

There is funding of $120.4 million in new training and study support. This includes 120 graduate placements for nurses, 140 postgraduate mental health scholarships, and extra graduate placements for allied health professionals and additional psychiatry rotations for junior doctors.

Funding will also continue for the free TAFE course offering, which has already seen close to 1,900 students enrolling in certificates in mental health and mental health peer work since 2019.

In response to the Royal Commission recommendation that the mental health system be designed and delivered by people with lived experience, funding of $40.7 million will expand and support Victoria’s lived experience workforce.

The Budget delivers funding for a statewide Mental Health Workforce Strategy by the end of 2021, fulfilling a key recommendation of the Royal Commission and ensuring the commencement of planning for the mental health workforce needs of the future.

An additional $11 million will deliver a Rural and Regional Workforce Incentive Scheme, attracting, training and recruiting more mental health professionals to country communities.

An estimated $700 million dollars of the Government’s mental health package will flow to the regions.

These investments build on last year’s Budget, which included $12.7 million for new training opportunities to support students and jobseekers looking to pursue a career in the mental health sector. Of that. $7.7 million was dedicated to begin addressing urgent workforce shortages in the mental health sector.

System Governance and Funding

Funding of $5 million will enable the establishment of Victoria’s first residential mental health service designed and delivered by people with lived experience. This service will provide short‑term treatment, care and support in a community setting, providing an alternative to acute hospital‑based care. Importantly, it will be designed and delivered by a workforce of people with lived experience.

The Victorian Budget 2021/22 also delivers $18 million towards a new entity, the Victorian Collaborative Centre for Mental Health and Wellbeing. This will bring together people with lived experience, researchers and clinicians to establish best practice in adult mental health services, including conducting research, sharing knowledge and ensuring the real, lived experience of Victorians is at the heart of mental healthcare delivery.

The Centre will also work with local services and research organisations in rural and regional areas.

More than $1 million in funding will support the establishment of a new non‑government agency, led by people with lived experience, which will be responsible for supporting organisations that work with and employ Victorians with lived experience, including providing accredited training and resources.

A new independent statutory Mental Health and Wellbeing Commission will also be established, with dedicated positions for Commissioners with lived experience. The Commission will hold the Government to account for the performance of the mental health and wellbeing system, ensuring reform remains on‑track.

Eight new Regional Mental Health and Wellbeing Boards will also include at least one person with lived experience of mental illness and one person with lived experience as a family member or carer.

In response to the recommendation of the Royal Commission that a new revenue mechanism protect the long‑term funding and future of the state’s mental health system, a Mental Health and Wellbeing Levy will apply to businesses with more than $10 million in wages nationally from 1 January 2022. While the measure will affect fewer than 5 per cent of employers, it does amount to a $3 billion payroll tax hike, and the measure has been roundly condemned by the Victorian Opposition and business groups which argue it will put at risk the state’s post-pandemic economic recovery.

Healthcare System

The Andrews Government has invested significantly in the Victorian healthcare system, acknowledging that an “unprecedented demand” is being driven by more people presenting to emergency departments, including those who deferred normal check-ups during lockdown and are now experiencing more complex or critical conditions.

This funding includes:

  • $759 million for more paramedics, more triage care and support staff for Ambulance Victoria, as well as funding to improve flow of patients in emergency departments;
  • $200 million to commission the opening of hospital facilities and support the operation of previously announced beds;
  • $136 million towards an elective surgery improvement fund to reduce the waitlist for elective surgeries;
  • $91 million to boost community-based health services, particularly to catchup on treatments which were deferred during the pandemic such as public dental and cancer screening;
  • $70 million to establish public IVF services, including $3.5 million to establish Australia’s first public sperm and egg bank;
  • $89 million to boost capacity and drive improvements in Victorian emergency departments;
  • $38 million for drug and alcohol services, including building and opening new residential rehabilitation beds and boosting community-based treatments;
  • $4.1 million to establish 3 new women’s reproductive health hubs and extend operating hours at the 8 existing hubs; and
  • Funding for an additional 200,000 student placement days in the public health system and support for clinicians to supervise students.

The 2021-22 Budget delivers $1.3 billion to continue Victoria’s public health response to COVID-19, including funding for contact tracers and the vaccine rollout. A further $50 million has been allocated to support establishing capability to manufacture mRNA vaccines in Victoria.

Health Infrastructure

The 2021-22 Victorian Budget invests $1.2 billion to build and upgrade health infrastructure throughout the state.

As part of this investment, this year’s Budget includes $556 million to deliver on the Victorian Government’s commitment to build and expand 10 community hospitals. These are located in Craigieburn, Cranbourne, Pakenham, Phillip Island, Sunbury, Torquay, Mernda, Eltham, Point Cook and the inner-south of Melbourne.

Further investments include:

  • An additional $103 million will deliver upgraded medical equipment, technology and infrastructure;
  • $100 million to fund new emergency department paediatric zones at University Hospital Geelong, Maroondah, Casey, Northern and Frankston hospitals. Planning work will also begin on new adult emergency departments at the Maroondah, Casey, Northern, Werribee Mercy and Austin hospitals;
  • $95 million to upgrade Maryborough Hospital, delivering a new two-level building with early works to commence in 2022. The new building will include day surgery, birthing suites, medical imaging, pathology, ambulatory services and urgent care;
  • $99 million to expand the Angliss Hospital with a new in-patient unit; and
  • $20 million boost to the existing Regional Health Infrastructure Fund.

Aged Care

In addition to substantial Commonwealth funding announced in the 2021-22 Federal Budget, this budget commits:

  • $29 million for public aged care services in Victoria; and
  • $65 million to rebuild the Glenview Community Care aged care facility in Rutherglen to deliver 50 beds, as well as to plan and design redevelopment of facilities at Cohuna and Camperdown.



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