This report does not constitute a rating action. MELBOURNE (S&P Global Ratings) May 7, 2024--A tax boost and fiscal discipline will determine whether Victoria delivers on its long-awaited surplus promise. The state could deliver its first cash operating surplus in six years. A A$3.6 billion boost in goods and services tax (GST) grants and strong growth in property and payroll tax should contribute to an operating surplus, albeit thin, by our measures, in fiscal 2025 (year ending June 30). The government has also promised to cut its capital expenditure (capex) pipeline. Promised fiscal consolidation could provide Victoria greater headroom at the 'AA' rating if delivered. The budget introduced a new fiscal target aimed at reducing net debt, at the general
