Rita Panahi: Hard-Left Labor government has plunged Victoria into economic crisis
The Business Council of Australia review has revealed South Australia is the best place in the country to do business while Victoria is the worst — and if the Allan government doesn’t cut regulations and taxes, more businesses will shift their investment interstate.
Rita Panahi
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Daniel Andrews said plenty of notable things during the Covid era from berating folk for enjoying sunsets at the beach to his oft repeated mantra of “I do not recall” during the Coates Hotel Quarantine inquiry.
But it was his commentary about South Australia that came back to haunt him this week.
Who can forget the former premier dismissively asking “why would you want to go there?” when discussing Victorians travelling to South Australia.
Well, there is one big reason why Victorians may want to cross the border; South Australia is the best place in the country to do business while Victoria is the worst, and by some margin.
Crippling red, green and black tape, together with record debt and increasing state taxes, is turning off investors with an increasing number opting to do business interstate.
It’s a sorry state of affairs with no signs of improvement in the short to medium term.
The Business Council of Australia’s annual review should shame the Jacinta Allan government, if they were capable of shame.
Whether an investor is opening a cafe or a childcare centre, Victoria makes it exceedingly and unnecessarily difficult with a slew of onerous regulations.
The BCA’s scorecard has Victoria dead last trailling not just every state but also the Australian Capital Territory and the Northern Territory.
We didn’t get here by accident. There was a great deal of self-harm and incompetence along the way.
A hard-Left Labor government full of economically illiterate ideologues with no respect or affinity for the business community, particularly small to medium size enterprises, plus an inept opposition has seen the state plunged into economic crisis.
BCA chief executive Bran Black points to the hostile business environment in Victoria for holding back investment.
“Victoria has some of the least competitive property tax settings, payroll taxes and business licensing requirements in the country — it fundamentally needs to look at how these are holding back its economy,” he said.
The report found Victoria ranked lowest overall as well as lowest for property taxes and charges due in part to the introduction of a Covid land tax surcharge.
Those six crippling lockdowns continue to cause pain for Victorians. The garden state was also the worst state or territory when it came to costs and regulations and second worst for payroll taxes and license requirements.
Compare that to South Australia, led for the past two and half years by infinitely sensible Premier Peter Malinauskas, from Labor’s Right faction.
He is presiding over a state that is not just claiming to be open for business but ensuring there is an environment that fosters growth thanks in part to a standardised, consistent planning system that gives investors a measure of certainty.
“South Australians have made it clear that they want their state to be destination number one for business, and other jurisdictions need to take note if they want to remain competitive in attracting business investment,” Mr Black said, praising the state’s “lower payroll taxes, lower property charges and less voluminous business licensing.”
It helps explain why South Australia is among the states that has experienced a net growth in the number of businesses moving interstate, while Victoria has gone backwards.
Analysis of Australian Bureau of Statistics data by the Institute of Public Affairs shows that since the end of Covid lockdowns, South Australia along with Queensland and Western Australia, have been the main beneficiaries of businesses moving interstate while Victoria has been the biggest loser.
The high tax burden and burdensome regulatory environment contributed to more than 3000 Victorian businesses moving to another state or territory.
As reported in the Herald Sun earlier this year Victorian businesses are currently being taxed at almost double the rate they were when Labor came to power.
Elections have consequences. So does reckless spending and project blowouts. And we are all paying a heavy price for Labor’s economic mismanagement.
Premier Allan may boast about Victoria being “open for business” but the state’s reputation as a debt-riddled, high-taxing and red, green and black-tape crazy jurisdiction speaks for itself.
After the release of the BCA’s data this week, Ms Allan questioned the validity of the report as it did not include her government’s latest initiative.
“The Business Council’s report doesn’t pick up on the housing reforms we announced in October,” she said.
That is a blessing. Those policies add only greater uncertainty and lack basic economic prudence.
If the Premier was serious about tackling the state’s record debt and creating a stable business environment she would start with cutting regulations, followed by cutting state taxes.
Otherwise we’ll see more businesses shift their investment interstate.
Rita Panahi is a Herald Sun columnist
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