Warrnambool's The Lookout misses out in Victorian state budget

Every other major project in the region hoping for funding also missed out on Tuesday as Treasurer Tim Pallas dedicated spending towards delivering Labor's commitments from the November election.

Mr Pallas described the austere budget as "two budgets in one" as the state attempted to make a start on paying down the $31.5 billion in debt accrued during the COVID-19 pandemic.

"This is the most difficult budget that I've had to frame, and I've done nine budgets now," he said.

"We had to borrow $31.5 billion to save jobs and save lives... Now is the time to confront the situation squarely and to repay that debt."

The budget locked in funding for Labor's big ticket election promises in the south-west, including a share of $116 million for a new tech school in Warrnambool, $5 million for a South West TAFE Building Innovation and Design Centre at Deakin University's Warrnambool campus, nearly $24 million for upgrades to four schools across the region, and $5.5 million for a positron emission tomography scanner at Warrnambool Base Hospital.

It also plunged more than $400 million into regional train services benefitting the south-west, with nearly $200 million to pay for cutting the price of V/Line tickets from nearly $80 to just $9.20, and almost $220 million to deliver more regional train services including five Warrnambool services every day of the week.

But funding those promises meant several long-awaited projects across the region missed out.

The Lookout, which will need up to $36 million to set up a much needed rehabilitation service, topped the list.

The project has already been on the drawing board for five years, but has consistently missed out on state and federal backing despite being "shovel ready".

Meanwhile, the budget included $36 million for an almost identical facility in Mildura which gained funding despite not being scoped.

Warrnambool's Surf Life Saving Club will also have to keep waiting for the $12 million it needs to redevelop its dilapidated facility.

Koroit's $10 million streetscape plan also missed out, as did Warrnambool's crumbling breakwater, which needs at least $8 million to repair, and the $16.6 million plan to redevelop Brierly Recreation Reserve in north Warrnambool.

Member for South West Coast Roma Britnell said she was "absolutely shocked" The Lookout was not funded, calling it "a slap in the face to the whole community".

The government trumpeted an extra $2.8 billion for Victorian roads over the next decade, bringing the total road investment to $6.6 billion over 10 years. It remained unclear how much of this funding would be spent on roads outside Melbourne, with dedicated regional road spending not being renewed. The average of $660 million a year was also well short of the $780 million road "blitz" it executed in the lead up to the election.

Ms Britnell said south-west road funding appeared "to have had a significant cut", calling the $1.2 billion dedicated to road maintenance across the state "a paltry amount". "It's a disgrace. (The Liberal party) promised $10 billion over 10 years," she said.

But the south-west wasn't alone in getting very little beyond what had already been pledged, as the government scaled back spending and introduced "efficiencies" and new taxes to begin paying down its eye-watering debt.

Mr Pallas described the debt as "a dead weight on the economy", but said it "had served its purpose". He described a two-part plan to start paying off the debt over the next 10 years

The first component will be an extra payroll tax levy from July 2023 on businesses with national payrolls above $10 million a year. "It will raise $3.9 billion over four years," the Treasurer said.

The second part of the plan is a major reduction in the tax-free threshold for land tax, with fixed charges and tax rates also rising. Mr Pallas said 860,000 taxpayers were expected to be affected, with each paying an extra $1300 a year on average.

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