New ABS data shows 129,000 Victorian businesses went bust last year

Victoria has been described as an “economic basket-case” as data shows 4.4 per cent of all businesses shut their doors for good last year – the highest of any state.

More than 350 Victorian businesses per day are shutting their doors for good as the state records the highest business exit rate across the nation, new data shows.

Analysis of new Australian Bureau of Statistics data, conducted by the Institute of Public Affairs, shows more than 129,000 Victorian businesses shut down last year or a quarterly average of 4.4 per cent of the total businesses – the highest of any state.

In the past three years since the pandemic, the number of businesses operating in Victoria has increased by 7.5 per cent – two per cent below the average of all other states and territories.

Victoria has recorded the country’s highest business exit rate. Picture: iStock

Western Australia topped the chart, with the number of businesses jumping by 11.5 per cent, while Queensland had the second highest count at 10 per cent, followed by South Australia at 9,9 per cent.

The analysis shows Victoria recorded a net loss of 3254 businesses to other states since the end of the pandemic, while Queensland gained 5,393 and Western Australia 1,495.

In comparison, NSW, which currently hosts about 160,000 more businesses than Victoria, lost 3674 to other states over the same period.

Institute of Public Affairs research fellow Lachlan Clark said the data showed Victoria had not recovered from the pandemic and remained an “economic basket-case”.

“Victoria needs a new ­economic path – raising taxes and taking on even more state debt is clearly not solving our problems,” Mr Clark said.

But a government spokesman called the data “cherrypicked analysis from a Liberal Party-aligned think tank”.

“Victoria has added more than 100,000 businesses since June 2020 – an increase of over 17 per cent – which is the largest percentage growth of any state,” he said.

“We’ll continue to back Victorian businesses — that’s why we’ve lifted the payroll tax-free threshold for small business and are replacing stamp duty on commercial and industrial properties, and we are also slashing the number of business regulators in half, making it easier for business to do business, with fewer processes and fewer forms.”

Last year, the IPA and Business Council of Australia found Victoria was the worst state in which to do business in Australia, citing red tape and taxes.

Originally published as New ABS data shows 129,000 Victorian businesses went bust last year