The Victorian Budget has just been announced and while there is more funding for hospitals and the health system, debt will continue to rise overall, with net debt going from $156.2bn by the end of the next financial year to $187.8bn by June 2028.

Of relevance to digital health SMEs, we were pleased to see Victorian Government re-commit to supporting the start-up sector by continuing the vital work of LaunchVic for a further four years with $40m in funding.

There is also further investment into mRNA technology, with BioNTech to establish its Asia Pacific mRNA clinical manufacturing facility, Innovation Centre and AI Early Warning System in Melbourne.

For small business, the government will provide tax relief by lifting the payroll tax-free threshold from $700,000 to $900,000 (from 1 July 2024), and then to $1 million (from 1 July 2025) – around 6,000 small businesses will stop paying payroll tax altogether, and a further 22,000 will pay less.

However, funding to Breakthrough Victoria will be reduced by around $90m each year, over the next four years, lessening the short-term impact of this unique funding capability at a time when access to capital remains one of the largest challenges for digital health companies.

Expenditure in the Medical Research portfolio will also reduce year-on-year from $68m to $57.3m in 2024/25. The budget attributes this reduction to the completion of the Melbourne Genomics Health Alliance and the funding of the Cumming Global Centre for Pandemic Therapeutics in 2023/24.

As macro-economic conditions improve in the coming years, we are hopeful that innovation, commercialisation and medical research funding will return to a growth trajectory, so that Victoria can continue to play a major role on the global health technology stage.

Key Takeaways

• $40 million in funding for LaunchVIC, continuing its vital work for a further four years.  

• $90 million per year reduction in funding to Breakthrough Victoria, over the next four years.

• $9.4 million for the Business Events Fund, to attract more high-profile international business events.

• $2.3 million to back small businesses with advice and support they need to grow.

• $8.8 billion to fund Victorian hospitals over the long term.

• $1.7 billion to build and improve hospitals & health facilities, incl new emergency depts for the Northern and Austin Hospitals, and a new inpatient tower for the Monash Medical Centre.

• The Royal Melbourne Hospital and Royal Women’s Hospital expansions in the Ardern Precinct have been abandoned, in favour of upgrades at the existing sites in Parkville.

• $35 million to prevent cyberattacks against health services.

• $4.5 million to support embedding culturally sensitive medical research practice and build capability of Aboriginal researchers and the sector, to better deliver positive health outcomes for Aboriginal Victorians.

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Read the full Budget Overview