Victoria lagging behind in new businesses amid increased taxes

Victoria has fewer new business start-ups than anywhere in the country, while many existing businesses are being forced to shut up shop — and industry leaders warn the state is going backwards.

Fewer businesses are starting up in Victoria in comparison to the rest of the country.

Victorian business is going backwards with the number of new start-ups trailing every other state and territory.

New analysis of Australian Bureau of Statistics data, by the Institute of Public Affairs, shows 13,000 fewer new businesses compared with 2021 levels.

At the same time New South Wales recorded an increase of 13,000 new businesses while Queensland saw an increase of 7,600.

Victorian businesses are also closing at the fastest rate, with 129,095 closing in 2023, 22,796 more than in 2021.

Victorian businesses are closing at a rapid rate in comparison to previous years.

“The latest ABS data confirms Victoria is closed for business,” IPA research fellow Lachlan Clark said.

“You can hardly blame would-be business operators thinking twice about starting a business in Victoria given the monumental economic mismanagement of the Victorian state government.

“Victoria is the biggest loser as the only state in the nation to experience a decline in new business start-ups over the past three years, no doubt set to get worse due to the catastrophic failure of the state government’s energy policies.”

A 2022 report by the Victorian Chamber of Commerce and Industry found Victoria was the hardest state to do business in.

Since then business has been whacked with new taxes in successive state budgets to fund a massive investment in mental health policy and rising debt.

Victorian Chamber of Commerce chief executive Paul Guerra says business confidence is low post-Covid. Picture: Jake Nowakowski

VECCI chief Paul Guerra said business confidence was low post Covid while other states offered better opportunities.

“We now have to look at this data to work out what is going on and reverse those trends,” he said.

“The cost of doing business in this state and the ease of doing business in this state is not the best.

“And if you’re not first, you might as well be last.”

Mr Guerra said some businesses were looking to move main operations from Victoria because of restrictive new and increased taxes.

Shadow Treasurer Brad Rowswell is urging the government not to impose any new taxes in the next state budget. Picture: Valeriu Campan

Shadow Treasurer, Brad Rowswell, called on the government to avoid imposing any new taxes on businesses in the May budget.

“Under Jacinta Allan, Victoria is broke and local businesses time and again are being made to pay the price,” he said.

“Those Victorians who dip their hand into their own pocket to start their own business and create opportunities for others, simply don’t trust that their punt will pay off under the Allan Labor Government. And who could blame them?

“Instead of getting out of the way and allowing new businesses to have a go, the Allan Government is hell bent on making their life harder with more taxes, more expensive power and a lack of skills to establish their workforce.”

A government spokesman said forecasts predicted Victoria’s economic growth would lead all states over the next five years.

“The Allan Labor Government has a range of programs and services to help businesses start, grow and thrive. We’ll continue to back businesses to innovate, invest and expand their workforce in our state,” he said.