Victorian Budget 2025/26: Quick Guide for the Built Environment
Delivered on Tuesday 20th May, the Victorian 2025-26 State Budget is titled “Focused On What Matters Most” and continues with the strong cost of living focus from last year’s budget, complemented by targeted investment in services that particularly impact families and communities. From a built environment perspective, this includes a $10.3 billion investment in new capital projects and a $202.4 billion commitment to existing projects already underway, with substantial investments in health, education, and rail and road infrastructure. While there is a gradual moderation in overall infrastructure spending as major projects are completed, the budget presents some significant new project opportunities coming online.
The following summary captures the key budget initiatives most relevant to built environment professionals, providing insights to inform your business development approach for the coming year.
Education
With the Government’s 2018 commitment to opening 100 new schools by 2026 wrapping up this year with 81 already open and the final 19 under construction (opening in 2026), the budget builds on these achievements with a $1.5 billion investment in the delivery of new schools, school upgrades, and maintenance. This investment ensures upcoming project opportunities for smaller practices targeting maintenance projects, and for medium and large practices looking to secure metro and regional upgrade work, but with fewer new schools or additional stages at new school projects funded.
Key investments include:
$336 million commitment to fund the construction stage of Aintree North Primary School and Officer Brunt Road Specialist School, the initial planning for the expansion of South Melbourne Primary School, and to deliver additional stages of works at four recently opened secondary schools, including Bermin Secondary College, Brinbeal Secondary College, Walcom Ngarrwa Secondary College and Yarrabing Secondary College
$322 million allocated to upgrade 35 schools across metropolitan and regional Victoria, with work packages likely to be tendered in the coming months
$237 million allocated to the acquisition of land for new schools and new campuses of existing schools in various municipalities, including Casey, Darebin, Melbourne, and Melton, supporting a future pipeline of work
$148 million for the Modular Classrooms Program to provide new modular learning spaces at existing schools approaching their capacity, presenting opportunities for prefabricated construction specialists
$115.5 million for repairs and essential maintenance in schools to make sure buildings and infrastructure are at their best
$48 million for upgrades to expand the permanent capacity at existing metropolitan schools to meet enrolment demands, including Casey Fields Primary School, Cranbourne West Secondary College, and Riverwalk Primary School
$25 million allocated to the Capital Works Fund to facilitate small-scale capital projects, including $11.5 million allocated to an initial 21 metropolitan and regional projects and $13.5 million for the next round of the Fund
$19 million for the Accessible Buildings Program, to fund modifications to existing schools to improve access and make schools more inclusive
$10 million for planning and developing future capital upgrades and expansions at the following 20 schools across Victoria:
Altona Green Primary School
Bacchus Marsh College
Boroondara Park Primary School
Broadford Secondary College
Coburg Primary School
Greenvale Primary School
Hallam Primary School
Lancaster Primary School
Maribyrnong College
Maryborough Education Centre
Melton Primary School
Mount Waverley North Primary School
Norris Bank Primary School
Sherbrooke Community School
St Albans North Primary School
The Grange P 12 College
Vermont Primary School
Warragul North Primary School
Winchelsea Primary School
Yarrawonga College P 12
$1 million for the development of a feasibility study for a maths and science school in Melbourne’s north-west.
Early Learning
The 2025-26 budget demonstrates a continued investment in the Best Start, Best Life early childhood education reforms, with a total of $2.2 billion committed to this 15-year Pre-Prep infrastructure program, ensuring an ongoing pipeline of kindergarten projects.
TAFE
The budget has also dedicated $11 million to increase training capacity at key regional TAFE facilities, including The Gordon TAFEs’ Geelong campus, South West TAFEs’ Hamilton campus, and Federation University TAFE campuses in Ballarat and Mt Helen.
In addition, the budget includes a previously committed investment of $25 million to co-fund the delivery of a new Future of Housing Construction Centre of Excellence at Melbourne Polytechnic’s Heidelberg campus, with an equal contribution from the Federal Government through the National Skills Agreement. The Centre is being developed to provide industry-relevant training to enhance the technical and digital skills of traditional construction and engineering trades in modern methods of construction. While primarily an educational initiative, this signals a government commitment to modern methods of construction that may shape future procurement approaches.
Health
A strong focus of this budget is wrapping up existing major projects, with A significant portion of health infrastructure funding ($634 million) allocated to opening and operationalising the following completed or nearly completed hospital projects:
The new Footscray Hospital
The redeveloped Frankston Hospital
The expanded Maryborough and District Hospital
Three new Community Hospitals in Craigieburn, Cranbourne and Phillip Island
Expanded facilities at Albury Wodonga Regional Hospital and University Hospital Geelong
Other key investments in healthcare maintaining the quality of Victoria’s health system include:
$119 million for infrastructure upgrades, including $57 million for the upgrade of critical infrastructure at the Royal Melbourne Hospital, and $62 million to enable the continued upgrade and replacement of essential engineering infrastructure at hospitals across the state
$10 million committed to the Mental Health Capital Renewal Fund for upgrades to existing mental health and alcohol and other drugs facilities across Victoria to improve the quality and amenity of the facilities in response to recommendations of the Royal Commission into Victoria's Mental Health system
$9.7 million to enable the Dandenong and Districts Aborigines Co-operative to fit-out a permanent home for the organisation
$7.5 million allocated to the Minor Capital Renewal Program for improvements to Victoria's public sector residential aged care facilities to uplift quality, safety, and amenity
Housing and Planning
With existing projects such as the $5.3 billion Big Housing Build and $1 billion Regional Housing Fund continuing to deliver social and affordable homes across the state, this year’s budget focuses on planning to enable future development. This includes a $24 million investment in delivering new planning controls for 50 key activity centres located around train and tram stops, which will help unlock an extra 300,000 homes for delivery across metropolitan Melbourne by 2015 - a clear opportunity for residential developers. It also includes a further $12 million commitment to unlocking more greenfield land for new homes with backyards, supporting the government's plan to progressively unlock 180,000 more homes across Melbourne's growth areas.
Working in partnership with the Commonwealth to support the delivery of new housing supply across the state, the budget has allocated $249 million for enabling infrastructure works to fast-track the delivery approximately 4,000 homes across the State. This includes more than 1,300 homes located in regional areas and a commitment for over 10% of the funding to be directed towards First Nations’ housing outcomes.
First Peoples
The budget demonstrates a continued commitment to self-determination for First Peoples, including a range of key investments in ACCOs to provide much needed services and support, plus an additional $5.4 million investment in the Aboriginal Community Infrastructure Program to enable Aboriginal organisations to build new or upgrade existing community infrastructure.
Emergency Services
The budget provides measures to strengthen the capacity of emergency services, including an investment of $18 million to deliver two new CFA satellite stations at Wendouree and Hampton Park and to deliver CFA stations in Winnindoo and Hoddles Creek, and to complete stations at Dartmoor, Leitchville, Kinglake West, Raywood and Yarram. An additional $14 million has been allocated to enable the construction of a new Victoria State Emergency Service Footscray unit, with the aim of providing better emergency service response and recovery support.
Roads and Public Transport
The Victorian government is investing $21.3 billion in infrastructure in 2025-26, maintaining a robust pipeline of work across the state. Major projects like the Metro Tunnel and West Gate Tunnel are nearing completion, with funding in this Budget primarily for their operationalisation rather than construction.
Commonwealth Government partnership initiatives
The Budget includes a significant $4.1 billion partnership with the Commonwealth to deliver the new Sunshine Station Superhub. This project will untangle a complex section of rail network from West Footscray to Albion, including two new dedicated regional platforms, an extended station concourse, three new rail bridges, new and upgraded tracks, and new signalling technology. Works are expected to start in early 2026 and be completed in 2030. This is a crucial first step towards a future Melbourne Airport Rail and an electrified Melton Line.
A $1.2 billion Road Blitz partnership with the Commonwealth will focus on delivering 19 road upgrade projects across growing suburbs in Victoria, improving safety and better connecting Melbourne's suburbs and Victoria's regions.
A further Commonwealth partnership will see up to $250 million spent on the Werribee Main Road Interchange Upgrade Project. This project includes upgrading four intersections, improving Princes Freeway on-off ramps, and providing an additional lane on the existing Werribee Main Road bridge crossing the Princes Freeway, in order to deliver significant improvements in travel times and road safety.
New Major Investments
Further road and transport investments include:
$50 million for critical rehabilitation works on the San Remo Bridge
$42 million for high-priority upgrades on regional and metropolitan roads and bridges to achieve improved network efficiency, road safety, freight capacity and travel times
$24 million for West Gate Bridge maintenance works to improve user safety, maintain serviceability and support more efficient freight movement
$15 million allocated to improve connections and safety on Victoria’s public and active transport network, including the walking and cycling network in Melbourne’s west
Sources: Victorian Budget 2025/26 Budget Overview, Budget Paper 4: State Capital Program, Budget Priorities: More homes for a growing Victoria, Budget Priorities: Self-determination for First Peoples, Budget Priorities: More funding for frontline care, Budget Priorities: Investing in our kids and their classrooms, Budget Priorities: Delivering our world-class transport network