The 2025 Victoria Budget allocations 2025 for the water sector deliver both continuity and challenge: $296.2 million in confirmed water funding for DEECA, and a 42 per cent mandated emissions cut for water corporations by 2025.
While no splashy new projects were announced, the government has sharpened its climate accountability, signalling that the next two years will be a performance reckoning for the sector.
$296 million to keep water flowing
The Department of Energy, Environment and Climate Action (DEECA), which manages Victoria’s water portfolio, will administer $296.2 million in 2025–26 under its Effective Water Management and Supply output. This figure anchors the state’s operational investment in water supply security, system maintenance, and resource management.
While the water sector commitments from the 2025 Victoria Budget focus on maintaining existing operations, they provide the foundation for continuity in service delivery, especially in regional areas. The department’s stated objectives include ensuring “safe, sustainable and productive water resources,” reflecting a stable policy trajectory.
While no new capital works or legislative changes specific to water infrastructure were introduced, the allocation continues to support long-term strategies and operational continuity across urban and rural systems.
New emissions target raises the bar
The most direct policy lever affecting the water industry this year is the government’s Whole-of-Government Emissions Reduction Pledge, with water corporations firmly in its sights. Under the pledge, Victoria’s publicly owned water authorities must slash their operational emissions by at least 42 per cent by 2025.
This mandate was highlighted in evidence presented at the PAEC hearings and reinforced in the Committee’s findings. The push stems from water corporations being among the state’s largest energy users, primarily through electricity-intensive pumping and treatment operations.
Minister for Climate Action, Steve Dimopoulos, told the Committee the water sector plays a “central role” in achieving government-wide targets. “Transitioning our schools, hospitals, and water corporations to renewable energy is essential,” he said, adding that the government expects full transition to renewable electricity by 2025 for all public entities.
Climate adaptation measures could broaden water oversight
While the emissions target represents the most explicit accountability measure for the water sector, the report also recommends that DEECA expand its climate action performance indicators. The Committee suggested this include improved reporting on Victoria’s resilience to climate change impacts, such as floods, droughts, and water stress.
This expansion, though not explicitly water-specific, would likely encompass water security and infrastructure adaptation, areas where DEECA’s climate and water responsibilities increasingly intersect.
Final Word: A quiet Budget, but one with teeth
There may be no ribbon-cuttings this year, but the 2025–26 Budget reaffirms that water is fundamental to Victoria’s long-term sustainability agenda. With nearly $300 million allocated to water management and clear climate-related mandates imposed on water corporations, the sector remains both supported and under scrutiny.
As DEECA continues its dual role as steward of the state’s water and climate resources, professionals across the industry will be watching closely—not just how dollars are spent, but how emissions reductions are delivered.