Victorian Budget 2026/27: Quick Guide for the Built Environment
Delivered on Tuesday 5 May, the Victorian 2026/27 Budget commits $19.4 billion in government infrastructure investment, with $4.4 billion in new total estimated investment added to the program.
The budget is strongest in education, health and road maintenance, with a notable emphasis on planning reform to enable future housing supply. The following summary captures the key initiatives most relevant to built environment professionals.
Housing
The housing agenda in this budget is weighted toward enabling future supply rather than immediate construction spend, with planning reform and long-term fund capitalisation the dominant themes. Key investments include:
$860 million over five years added to the Social Housing Growth Fund, targeting more than 7,000 additional social housing homes over the next decade
$26 million for additional emergency accommodation to expand support for rough sleepers
$19 million for new and replacement Specialist Disability Accommodation homes statewide, completing 2029-30
$15.6 million for the continued implementation of the 10-year greenfields plan for Melbourne's outer growth corridors, sustaining a long-term pipeline of subdivision design, civil infrastructure and community facility work
$15 million for five new supportive housing sites in Seddon, Melbourne, St Kilda, Shepparton and Mildura
$9.8 million for the Development Facilitation Program to fast-track significant housing projects
There are also significant ongoing infrastructure projects unlocking housing-related opportunities, including:
Suburban Rail Loop East: tunnelling commences in 2026 with two station contract packages in procurement, to be finalised in 2026 and 2027. The first stage is projected to support around 70,000 new homes over the next 30 years, with significant mixed-use and residential development opportunities flowing from each precinct.
High-rise Redevelopment Program (TEI $1.2 billion): the preferred partner for the North Melbourne PPP package is expected to be appointed in 2026, with main construction targeted for completion by 2031. This is the most active near-term procurement opportunity in the social housing space, covering the redevelopment of 44 ageing public housing towers across inner Melbourne.
Ground Lease Model Project 1 Flemington augmentation (400 social, up to 300 affordable homes) is in planning with main works expected to be completed by 2031. This represents a precinct-scale residential development opportunity worth keeping an eye on.
This budget also invests in key reforms that will shape the planning and regulatory environment for built environment professionals, including an $11 million investment to implement the Planning Amendment (Better Decisions Made Faster) Bill 2025, covering new regulations, redesign of the Victorian Planning Provisions and broader planning scheme reform — changes that will directly affect approval timelines and processes for development projects across the state.
Education
Education is the strongest sector for new built environment work in this budget, with $1.6 billion committed to school capital and close to $500 million for early childhood infrastructure.
Schools
$392 million for 4 new schools and campuses at Rockbank Toolern Road Primary (Melton), South Melbourne Primary (Port Phillip), Thompsons East Primary (Casey) and Wollahra Secondary (Wyndham), plus additional stages at 3 recently opened schools, including Homestead Senior Secondary College (Wyndham), Wulerrp Secondary College (Casey) and Yubup Primary School (Hume), and planning and early works for a further 3 new schools, including Arden Secondary School (Melbourne), Pattersons Road Secondary School (Casey) and Preston High School (Darebin).
$295 million to upgrade 31 schools across Victoria, comprising $200 million for 21 metropolitan schools, and $95 million for 9 regional schools, and covering arts spaces, sports facilities and learning spaces.
$217 million for modular classrooms at schools reaching capacity, including Broadford Secondary College
$104 million for land acquisition for new schools and new campuses of existing schools across Cardinia, Greater Geelong, Melbourne, Hume, Mitchell and Wyndham
$28.8 million for the Accessible Buildings Program across school facilities
$25 million Capital Works Fund for small-scale projects at 28 named schools including Cardross Primary, Toolangi Primary and Manor Lakes P-12 College
$22 million for planning of future new schools
Early Learning
$201 million for up to 22 new kindergartens on or near public school sites
$180 million in grants for 27 new and expanded kindergartens and childcare centres
$71 million for 5 new government-owned Early Learning Victoria centres
$9.8 million for grants to improve and upgrade existing early childhood infrastructure
TAFE
$50 million (Commonwealth/state co-funded) for the Victorian Renewable Energy TAFE Centre of Excellence at TAFE Gippsland in Morwell, with connecting hubs in Ballarat and Warrnambool
$30 million (Commonwealth/state co-funded) for the Digital, AI and Technology TAFE Centre of Excellence at Chisholm Institute’s Frankston Campus
$21 million (Commonwealth/state co-funded) for the Home and Community Care TAFE Centre of Excellence at Holmesglen Institute, including a purpose-built smart house with adaptive technology
$5 million for TAFE campus disability accessibility upgrades statewide
Health
This budget commits $567 million to health infrastructure, with significant new redevelopments, expansion works and a substantial distributed maintenance and renewal program.
$305 million (completing 2031-32) to redevelop Dandenong Hospital: new operating theatres, ICU, upgraded and redesigned emergency department with separated paediatric, adult and mental health streams, and improved day surgery. Managed by the Victorian Infrastructure Delivery Authority
$249 million for maternity services expansion across the western suburbs, including a new 24 bed postnatal ward at Sunshine Hospital, an additional 8 new postnatal beds across other locations, and nine special care nursery cots at Joan Kirner Women’s and Children’s Hospital
$95 million for Werribee Mercy Hospital emergency department expansion
$65 million (completing 2029-30) for the Gippsland hospitals upgrade program at Wonthaggi and Warragul hospitals: medical imaging, pharmacy, pathology improvements and amenity upgrades
$35 million for Cranbourne Community Hospital uplift
$34 million for Craigieburn Community Hospital uplift
$20 million for University Hospital Geelong paediatric emergency department uplift
$11 million for additional dialysis beds at Cranbourne Community Hospital
A substantial maintenance and renewal program runs alongside the new projects, with distributed opportunities across metropolitan and regional Victoria:
$75 million Regional Health Infrastructure Fund for renewal and upgrades across rural and regional health services
$20 million Engineering Infrastructure Replacement Program for boilers, air handling units and fire risk management systems at hospitals statewide
$15 million Metropolitan Health Infrastructure Fund for improvements across metropolitan health services
$10 million Mental Health and Alcohol and Other Drugs Capital Renewal Fund for upgrades to specialist facilities
$7.5 million for public sector residential aged care facility upgrades
Transport & Infrastructure
This budget commits a record $1.04 billion to road maintenance in 2026-27, with the transport program otherwise focused on delivery of existing major projects and a targeted package of new capital works.
$181 million for V/Line passenger rail network upgrades: control systems renewals, axle counter replacements and major maintenance
$133 million for programmed road maintenance activities in 2026-27
$124.5 million for environmental approvals and procurement of the Victorian Renewable Energy Terminal at Port of Hastings
$91 million for high-priority road upgrades: $23 million metropolitan, $68 million regional, with named projects across Gippsland, the Grampians, Loddon Mallee and Barwon
$76 million for planning and early works toward Melton Line electrification
$70 million for tram network safety and accessibility improvements including new accessible stops and a power substation at Wattle Park
Community & Emergency Services
This budget delivers a targeted program of new emergency services facilities and justice infrastructure works across metropolitan and regional Victoria.
$32.5 million (new TEI) for corrections system capacity including youth justice infrastructure
$24 million for four new CFA stations (Charlton, Mirboo North, Kingston, Woodvale), upgrades at Yarrambat station, planning and design for stations at Barongarook West and Lakes Entrance, and land acquisition at Nar Nar Goon and Beveridge
$16 million for two new VICSES facilities (Port Phillip and Corio units) and land acquisition for Whitehorse unit
$11 million for maintenance, repair and renewal of court buildings statewide
$6 million for diesel emission capture systems, bedroom upgrades and design works at Fire Rescue Victoria stations including Eastern Hill and Richmond
$1.5 million to complete new surf lifesaving facilities at Bancoora and Point Lonsdale
Cultural, Tourism & Recreation
This budget continues investment in Victoria's major cultural precincts and provides a mix of regional community facility and infrastructure renewal works.
$43 million for infrastructure renewal in the River Murray catchment area
$29 million to continue the Melbourne Arts Precinct Transformation encompassing Arts Centre Melbourne and the NGV
$20 million for asset maintenance and renewal at Kardinia Park Stadium Trust and State Sport Centres Trust
$11 million for Hamer Hall upgrades
$7.9 million for Great Ocean Road coast and parks upgrades including the Twelve Apostles Precinct and renewal of the historic Cape Otway Lightstation
$4 million for the Rochester Aquatic Facility
First Peoples
This budget includes dedicated First Peoples capital commitments across health, housing and justice, with an emphasis on purpose-built, community-led facilities.
$31 million for the Wathaurong Dreaming Project: purpose-built health and wellness facility for Wathaurong Aboriginal Co-operative, North Geelong
$9 million (TEI) for a new Aboriginal Family Violence Refuge, Horsham (Homes Victoria PNFC; completing 2027-28)
What Now?
The education, health and housing sectors offer the most active pipeline of new work in this budget. For larger teams, the Dandenong Hospital Redevelopment and the High-rise Redevelopment PPP are the most significant near-term procurement opportunities, with both progressing through the Victorian Infrastructure Delivery Authority. The school upgrade program, which spans 31 schools across metropolitan and regional Victoria, represents one of the most broadly distributed construction pipelines in the budget, with packages suited to builders, engineers and consultants of all sizes. The hospital maintenance and renewal program, emergency services facilities and regional infrastructure works provide consistent opportunities for businesses with established relationships in those sectors.
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Sources:Victorian Budget 2026/27 Budget Overview, Budget Paper No. 4 — State Capital Program, Budget Priorities: Regional Victoria, the place to be, Budget Priorities: Making Life More Affordable, Budget Priorities: Making it Easier to Get Free Healthcare, Budget Priorities: Realising the Potential of Our Kids, Budget Priorities: Keeping Communities Safe