Victoria's Big Build refers to the more than 180 major road and rail projects that is now at the heart of the Victorian Labor Government’s business model. As the state’s manufacturing industries have diminished, Labor has found a new role for the state - to build the infrastructure needed to accommodate the high population growth delivered by successive federal governments’ 'Big Australia' immigration policies.

The article argues that the Big Build is not sustainable, in part because the federal government, including the current Albanese Government, will not provide Victoria with the funds needed to finance it. The authors argue that Victoria urgently needs a new business model, in which the massive funds borrowed for the Big Build are put to alternative uses, like financing the State’s renewable energy transformation and a new industry policy.

Key points

• The Australian economy is trending towards a reliance on commodity industries. The Albanese Government’s recent Future Made in Australia policy direction does not involve spending in Victoria.
• The long-standing Victorian aspiration to become a globally competitive hub for knowledge intensive industries has failed. Moreover, despite Melbourne’s massive size as a service centre, Victoria’s international trade in services is also in deficit.
• To sustain the Big Build in a context where the federal government is a minor contributor to the capital required, Victoria will have to levy additional taxes, making it less attractive as a location for business investment.
• Victoria needs another direction that at least holds out the prospect of a more productive and economically-sophisticated future.