Peak Vic business body releases Budget submission wishlist

Victoria’s peak business body has called on the Allan government to make major changes — and fast — before the state loses it’s competitive edge, and has made it clear “there is no possibility of absorbing any further tax impost”.

The Allan government must cut taxes and red tape as a matter of urgency if Victorian businesses are to thrive and the state to prosper.

It must also ensure affordable and reliable energy into the future and make Victoria the national leader for trade apprenticeships to get the state moving, a peak business body says.

In its submission to the 2025-26 State Budget, released on Monday night, the Victorian Chamber of Commerce and Industry (VCCI) called for the government to support the property sector, increase investment and boost housing supply by cutting land tax and reducing regulation.

VCCI chief Paul Guerra said Victoria’s fiscal position was “problematic”, with a “heavy burden of taxation” that meant the state was at risk of losing its competitiveness and attractiveness as a place to do business.

Victorian Premier Jacinta Allan. Picture: David Crosling

“Employment growth in the government sector is outstripping the private sector, creating additional pressures on the Victorian Budget. This also creates a productivity challenge for Victoria,” he said.

“Fixing these challenges and creating the right policy settings to support growth, increase confidence and boost productivity must be the focus of the 2025-26 Budget and beyond.”

Mr Guerra said for Victoria to advance, it needed to regain the confidence of business and investors into the state.

“This is best done by addressing debt, stimulating the property sector, ensuring no new taxes and providing a clear road map for secure and affordable energy. With that as a base, we can look to grow the economy from the certainty that will ensue,” he said.

State-based taxes on business dampened growth and investment, with the sector already wearing both the Mental Health levy and the Covid Debt Levy, the VCCI Budget submission notes.

“There is no possibility of absorbing any further tax impost. Just three taxes alone – payroll tax, land tax and land transfer duty for commercial and industrial land represent an average 40 per cent of Victoria’s total tax revenue. These taxes have increased at an average annual rate of 7.6 per cent in nominal terms,” it goes on to say.

Victorian Chamber of Commerce and Industry chief executive Paul Guerra

And while it welcomed the Victorian government’s promise in December 2024 to reduce the

regulatory burden on business by about $500m by 2030, VCCI said it wanted to see the move fast-tracked.

The whopping 400,000 apprentices now needed in the state, were needed “today”, and new resources industries – like titanium, zirconium, rare earth elements and mineral sands — should be developed, VCCI said.

As global trade tensions rose, Victoria also needed to be positioned as Australia’s home base for innovation, defence and advanced manufacturing, it said.

VCCI has warned Victorian businesses cannot cop more taxes.

It also needed to “double down on exports”, Mr Guerra said.

“Over time, Victoria has become a more difficult, complex and expensive place to do business,” he said.

“We need new growth drivers in Victoria to underwrite the next wave of global opportunity and prosperity … this means value adding to everything we do and exporting at

a significant scale.”

On energy, Mr Guerra said Victoria was quite simply running out of gas and there was no clear plan for replacing coal-fired electricity generation.

“Without urgent intervention, the state faces an energy crisis. The solution lies in providing certainty for private sector investment — not further government interventions,” he said.

Originally published as Peak Vic business body releases Budget submission wishlist