Today’s State Budget of new and increased taxes and levies will hit medium to large businesses and property owners. It will directly impact jobs and investment in Victoria.
There are some elements of the Budget that business welcomes, particularly the progressive reform to abolish stamp duty and transition to an annual land tax for commercial and industrial properties, which the Chamber was instrumental in informing. Another positive for small business is the increase in the payroll tax threshold from $700,000 to $900,000 in 2023-24 and $1 million in 2024-25, and small businesses with a payroll of less than $5m will benefit from a cut in payroll tax.
The Victorian Chamber also supports the Economic Growth Package for businesses including the reduction of duties on business insurance, the Business Acceleration Fund to make it easier for businesses to grow, funding for Services Victoria to deliver regulation reform, funding to boost exports, investment in major events, R&D funding and an increased allocation for TAFEs. The $1bn in funding for the SEC will also help to accelerate much-needed renewable energy projects.
Unfortunately, the negative outweighs the positive initiatives for medium and large businesses with a new COVID Debt Levy applying to businesses with national payrolls of more than $10m, removal of the tax-free threshold for businesses with payrolls of more than $5m, as well as owners of more than one property – residential, industrial or commercial. This is in addition to the previously announced 42 per increase to WorkCover premiums.
These additional taxes on medium to large businesses in particular will be difficult to absorb given they are already operating in a tough economic climate with increased costs in energy and supply chain.
The Budget provided funding for five of the Victorian Chamber’s top 10 recommendations in our Budget Submission.
To be attributed to Victorian Chamber of Commerce and Industry Chief Executive Paul Guerra:
“Today’s State Budget takes Victoria from the most locked down state in Australia to one of the highest taxing, as the Government continues to hit business with the bill for the debt incurred throughout the pandemic and cost blowouts in the WorkCover scheme.
“The Government says this is the plan to pay off the ‘COVID credit card debt’ but they’re doing that by using medium to large businesses and property owners as an ATM over the next 10 years. It’s certainly a departure from the ‘all in it together’ approach taken throughout the pandemic and this will directly impact jobs and investment in Victoria.
“There are some positive initiatives including funding for manufacturing, major events, exports, renewable energy and training. The Victorian Chamber also welcomes the stamp duty reform and the payroll tax offsets for smaller enterprises, but this Budget will be remembered for job cuts and tax hikes.”
Mikkayla Mossop, firstname.lastname@example.org, 0423 883 945