Victoria in need of ‘significant corrective action’ as thousands of businesses flee the state

New research has revealed more than 3000 businesses have packed up and left Victoria since the end of Covid lockdowns in 2021. See the figures and which states are profiting off Vic’s business losses.

Victoria’s growth rate of new businesses was the lowest in the nation as thousands opt to flee the state. Picture: Getty Images

More than 3000 businesses have packed up and left Victoria since the end of Covid lockdowns in 2021, new research shows.

Analysis of Australian Bureau of Statistics data, by the Institute of Public Affairs, shows that Victoria experienced the largest net flow of businesses than any other state.

Between January 2022 and March 2024, 3085 Victorian businesses moved interstate, according to the data.

At the same time, Queensland welcomed 4276 new businesses, while Western Australia saw an increase of 1048 and South Australia enjoyed 745 more. New South Wales lost 2680 businesses in the same period.

Meanwhile, the figures showed Victoria’s growth rate of new businesses was the lowest in the nation, at 6.30 per cent – or an increase of 43,143 companies between March 2022 and the end of March this year.

New South Wales, in comparison, had a growth rate of 7.40 per cent, with 61,053 more businesses opening up in the same time frame.

Experts say businesses fleeing the state is a “long-term effect” of the state’s “failed” pandemic response. Picture: NCA NewsWire

Institute of Public Affairs research fellow Lachlan Clark said the data confirmed Victoria is suffering the “long-term effects of the state’s failed Covid-19 response”.

“What this latest data confirms is that Victoria is the worst place in the country to run a business, and unless significant corrective action is undertaken, businesses will continue to flee Victoria, and it will cost jobs,” Mr Clark said.

“Given Victoria’s disastrous pandemic response and economic management, it is hardly a surprise that businesses are fleeing Victoria for states with more business-friendly environments, such as Queensland and Western Australia.”

Victorian Chamber of Commerce and Industry chief executive Paul Guerra said Victoria needed “fewer regulatory hoops to jump through”. Stadium. Picture: Mark Wilson

Victorian Chamber of Commerce and Industry chief executive Paul Guerra said Victoria had more work to do to make the state more attractive to do business.

“Business people will set up where they can minimise their costs and have fewer regulatory hoops to jump through … if it gets too hard to run a business here, it’s inevitable that they will leave,” Mr Guerra said.

“In Victoria, we have the Covid levy, the Mental Health Levy, increasing concerns around energy affordability and availability – and commercial property owners are currently opening their land tax bills which have all increased.

“The Victorian Chamber is continuing to advocate for initiatives and measures that make Victoria a more attractive place to do business.”

Shadow Treasurer Brad Rowswell urged Victorian businesses to stay in the state. Picture: NCA NewsWire

Earlier this month, Shadow Treasurer Brad Rowswell issued a desperate plea to Victorian businesses, urging them not to leave the state.

“Labor can’t manage money, which is making life harder for every Victorian and pushing businesses to shut up shop and head interstate,” he said.

“When a business closes its doors in Victoria, only to open in another state - jobs, innovation and opportunity are also lost in our state.”

A government spokesman said the movement of businesses between the start of 2022 and March 2024 accounts for less than the 0.5 per cent of operational businesses in Victoria.

“Victoria has created 90,000 new businesses since 2021 alone – more than any other state - and 170,000 since the Labor Government came to office,” he said.