Victorian businesses forking out almost double in taxes since Labor came into power

Struggling business owners are forking out almost double in taxes compared to what they once paid before Labor came into power, pushing many to the brink of despair.

Victorian businesses are being taxed almost double what they were when Labor came to power. Picture: file image

Victorian businesses are being taxed almost double what they were when Labor came to power, a new report has revealed.

According to the Parliamentary Budget Officer report, published on Saturday, payroll and land taxes have grown 94 per cent taking in an extra $6bn since Labor came to office in 2014.

Over that time land tax grew 193.2 per cent while payroll tax increased by 67.6 per cent.

Land transfer duties on commercial and industrial properties also grew a staggering 157 per cent over the decade.

Australian Bureau of Statistics data for the same period showed Victoria had 7,606 fewer registered businesses, compared to 11,031 more in Queensland and 8,147 more in New South Wales.

Small Business Australia executive director, Bill Lang, said cost pressures on Victorian businesses were pushing many to the brink of breaking.

Mr Lang said latest data showed more than half reported being unable to operate at a profit post Covid.

Small Business Australia director Bill Lang says cost pressures on Victorian businesses were pushing many to the brink of breaking. Picture: Arsineh Houspian

“What these small business families need is a supportive Victorian government working to keep the costs of running a business down, not the constant pushing the cost of doing business up,” he said.

“Payroll tax is a tax on employment, which coupled with mandated increases in wages, penalty rates, an inflexible employment market, discourages small and medium business owners from employing staff and should be abolished or at the least greatly reduced.

“For too long small businesses have been treated as nothing more than an ATM by government at all levels, especially so in Victoria – the highest taxing state in Australia, a state with the highest energy costs and the most difficult place to do business of any state in Australia.

“It is why we continue to see businesses closing their doors, while others are relocating to take advantage of more favourable business conditions.”

Opposition leader John Pesutto said the tax increases on businesses hurt all Victorians through higher prices, fewer local job opportunities and by driving critical economic investment interstate.

Local business owners are struggling under the mounting cost of increased taxes. Picture: file image

“Victoria needs a competitive tax system that encourages business growth, not one that punishes it,” he said.

“A Liberals and Nationals Government I lead will strive to make Victoria’s tax system the most competitive in the nation.”

Victorian Chamber of Commerce and Industry chief, Paul Guerra, said the current imposts of payroll tax and land tax were made worse by Covid and mental health levies imposed in recent state budgets.

“Now is the time to stimulate growth of business, as that is the key to recovery,” he said.

“The tax system in this State, and this nation, needs a major overhaul as the current settings disincentivise employers from hiring staff and discourage businesses from investing in property.

“Money is mobile and businesses will find other places to set up, employ people and buy offices or factories if it remains unattractive and unviable to do so here.”

Mr Guerra said he welcomed the both the move by the state government to increase the payroll tax threshold from $700,000 to $900,000, and reforms to commercial property taxes.

“But more needs to be done to make Victoria an attractive place to do business,” he said.