Victorian services score major digital overhaul Budget reveals major upgrades, data centre focus. By Denham Sadler on May 07 2026 12:53 PM Print article Victoria is investing heavily in data centres. Photo: CDC The Victorian government has unveiled a major push into digital infrastructure, AI and data centres in this week’s state budget, alongside a wave of funding to modernise public sector technology and strengthen cybersecurity. Treasurer Jaclyn Symes handed down the budget on Tuesday afternoon. At the core of the tech announcements is a sweeping overhaul of government systems. The state will invest $105.9 million to upgrade the digital platforms used for child protection and family services, including new foundations for case management systems designed to support frontline workers. Schools running their own standalone tech systems will also be brought onto centralised platforms managed by the Department of Education, with $30 million allocated over two years to reduce cybersecurity risks and improve consistency. Emergency and frontline services are also set for upgrades. Fire Rescue Victoria will receive $27 million to modernise its payroll systems, while Victoria’s Triple Zero emergency communications platform will be boosted with $67.5 million. Victoria Police will see almost $80 million directed to IT system upgrades, and $37 million will go towards maintaining cybersecurity protections across public health services and Ambulance Victoria. Doubling down on data centres The Victorian budget also revealed just how crucial data centre projects now are to the state’s economic future. The significant surge in data centre projects in Victoria has accounted for all growth in the state’s private commercial building approvals and helped to balance a sharp drop in house prices. The overall value of commercial building approvals in the state is at $13 billion, up from $6 billion just a year ago. But when data centres are removed from the calculation, the total value is less than $5 billion. “Global investment in data centres has expanded rapidly, as the need for computer processing power has accelerated alongside rapid developments in artificial intelligence technology,” the budget papers stated. “Data centre construction contributes to business investment through both the physical warehouses and the specialised computing equipment itself. “The significant uptick in the construction of physical data centres is evident in data on building approvals and work done on Victorian building construction, where data centres are a rapidly growing proportion of overall commercial building investment.” There are, however, major environmental concerns surrounding data centre projects around the country. To help address this, the Victorian government will be creating a new data centres project team within the Department of Energy, Environment and Climate Action, with $1.6 million in funding annually over the next two years. This team will be responsible for designing and implementing a framework for data centre investment and risk management to ensure energy security and reliability, and to minimise the impact on energy prices for households and businesses. AI skilling and upskilling The Victorian budget also allocated $30 million for the Digital, AI and Technology TAFE Centre of Excellence at Chisholm Institute’s Frankston campus, which was announced earlier this year. This will allow the institute to “train more students in emerging technologies for the digital and AI jobs of the future”. The state government will also continue its AI Career Conversion Support program, which aims to safeguard jobs in industries that are at risk from AI, and for the implementation of its Sustainable Data Centre Action Plan. An AI Advisory Committee will also be established within the Department of Government Services to ensure the public service can “safely harness emerging tech trends”. The focus on AI and data centres comes after the Victorian government released an AI Mission Statement in February, which outlined how it would be seizing the “once-in-a-generation” opportunity presented by AI, with plans to be the nation’s capital for the technology. Denham Sadler Denham Sadler is a freelance journalist based in Melbourne. He was previously Editor of StartupSmart, and writes on tech and politics. His work has been published in The Saturday Paper and The Guardian. Tags: victoria budget ai data centres digital infrastructure