Victorians could foot the $1.5bn funding top up for hospitals with new or increased taxes

Treasurer Tim Pallas hasn’t ruled out battering Victorians with more tax, despite conceding his government has “pretty much” taxed the state’s business sector dry.

Treasurer Tim Pallas has refused to rule out hammering already battling businesses and households with more taxes as he puts ministers on notice over spending in an attempt to recoup a $1.5bn emergency funding top up for hospitals.

Despite conceding that the government has “pretty much” taxed the state’s embattled business industry dry, Mr Pallas on Wednesday left the door open to hiking taxes further to tackle Victoria’s skyrocketing debt.

Refusing to rule out new taxes for Victorians or cuts to services, Mr Pallas said he could “give no assurances about where the government is going with this matter”.

“I’m not ruling anything in or out at the moment,” he said.

Asked what extra tax levers the government could pull, Mr Pallas said it had “pretty much well done most that we could do” in regard to business and investors.

But when pressed on whether the government had ruled out any more taxes for the industry, the Treasurer said: “I’d never say never”.

Industry leaders have slammed the suggestion, saying it would see more businesses collapse under already heavy tax burdens.

With another $1.5 billion delivered to the state’s hospitals last week, the Treasurer has told all ministers to reel in spending, revealing he was “a little bit unhappy” after being told to cough up the extra funding.

He, however, noted that the soaring demand for health services was “beyond the control of the hospitals”.

Tim Pallas has put all ministers on notice over spending. Picture: Asanka Ratnayake

“The Premier and I have discussed this, and we’re committed to preserving our fiscal targets and our fiscal strategy, so that will essentially mean that the government’s going to have to make further adjustments in terms of our budgetary settings,” he said.

“I do make a point to the Health Minister and to others, we really do need a return to the level of fiscal responsibility and attention to financial obligations.”

The pay dispute between the ambulance union and the government is yet to be resolved. Picture: X/Ambulance Union Victoria

Victorian Chamber of Commerce and Industry chief executive Paul Guerra said industry had made it clear to the government that “businesses cannot withstand further tax or levies”.

“Any increase on current tax or levies will see further business fallout and collapse,” he said.

“The State Government needs to provide stimulus for real business growth which will require a strong partnership between government and the private sector to help the state grow its way out of debt.”

Victorian Chamber of Commerce chief executive Paul Guerra. Picture: Jake Nowakowski

Opposition Leader John Pesutto told Victorians to “brace yourselves” for more tax hikes and service cuts.

“Premier Jacinta Allan last week and in the days since has been called upon to explain where the $1.5 billion is supposed to come. What cuts will it involve? Will it involve tax increases?” he said.

“Treasurer Tim Pallas this morning has indicated that it will almost certainly be both.”

The Treasurer on Wednesday also signalled that emergency services unions would struggle to squeeze any more money out of the government as a series of pay disputes raged on.

“I’ve been asked (by ministers for more funding) absolutely,” he said.

Leader of the Opposition John Pesutto has told Victorians to brace for more taxes. PICTURE: Nicki Connolly

“But sometimes the answer offends,” he said.

“Sometimes it’s no.

“I’m talking to every minister in exactly the same terms.”

The comments come just one week after Reserve Bank Assistant Governor Sarah Hunter said Victoria’s economy was “really struggling” and “underperforming” compared to other states.

Mr Pallas, who recently met with top ratings agencies in the US to discuss Victoria’s credit rating, however, claimed discussions were “very positive” and the agencies were “quite complimentary of the economy”.

“We’ve got a pretty clear idea where each of the ratings agencies, where their tolerances lie before you fall in the territory for a review,” he said.

“We’re keeping a close eye on that.

“Our assessment is we’ve still got breathing space.”