Andrews government to fill coffers with billions more in payroll, land tax

Victoria’s tax take will skyrocket by $10bn in coming years as the economy recovers from the pandemic. Here’s who is being hit hardest.

Victoria’s tax take will increase by more than $10bn from pre-Covid levels over the next four years, with low unemployment to boost payroll tax and land tax to soar.

The Andrews government’s latest budget shows a major increase in the amount of money it will collect.

In 2018-19, Victoria collected $23.8bn in taxes but this figure has now risen to $30bn and is expected to rise even further over the forward estimates to $35bn.

By 2025-26, tax revenue will have increased by 47 per cent on pre-pandemic levels.

One of the biggest sources of this new income will be in payroll tax paid by businesses with more than $700,000 in wages.

Money from these companies will hit $6.8bn in 2022-23 and rise to $8.23bn in four years as payroll tax credits provided to employers who took on staff are phased out.

Sam and Matt Cameron with daughters Daisy, 12, and Poppy, 10. Picture: Mark Stewart

The massive increase in payroll tax is expected to be boosted by the state’s low unemployment rate and ongoing economic recovery.

Stamp duty, one of the state’s biggest sources of revenue, will drop off as the property market cools but land tax will continue to climb as high as $5.9bn.

Despite the Andrews government partnering with the private sector to run VicRoads’ registration and licensing, it is also expecting car ownership to be so popular that fee income rises from $1.9bn to $2.3bn over four years.

Taxes from the pokies will rebound now that Covid-19 restrictions have lifted and Victoria’s laws have been altered to tax the machines at a higher rate in Crown casino.

Gambling revenue in total lift will lift to $2.7bn as lotto and sports betting are expected to rise in popularity.

Opposition Treasury spokesman David Davis said it was unfair that businesses weren’t given ­payroll tax relief while the state’s recovery was still under way.

He said Victoria had the highest-taxing government in the state’s history.

“It’s a smack on businesses recovering,” Mr Davis said.

“The truth of the matter is that all these major (tax) categories have gone up.

“More cost blowouts and higher taxes are not a recipe for recovery.”

Small Business Australia executive director Bill Lang said more help was needed for local businesses.

“This is a very disappointing budget for small-business families, who are seen as nothing more than revenue raisers for the state government to pay the billions needed for the ever-growing public service, pet projects such as the Commonwealth Games and pork-barrelling where the govern­ment senses electoral diff­iculties in Ballarat and Melton,” he said.

“There is nothing in this budget to aid the recovery of small businesses still impacted by the Victorian government’s anti-business Covid policies, despite one in two still unable to turn a profit. “

Motorists are expected to fork out $569m in speed camera fines in 2022-23, an increase of $98m on the previous year.

Treasurer Tim Pallas says Victoria would record a $650m surplus within four years. Picture: Ian Currie

Andrews defends post-Covid budget

Premier Daniel Andrews spent Wednesday morning spruiking his government’s state budget, denying it was an election budget but a “post-Covid budget”.

“This is about repairing the damage that the pandemic’s done to our health system,” Mr Andrews told the ABC.

“It’s about giving our (healthcare workers) an extra pair of helping hands, more staff, more resources, more patients treated quickly and those patients getting the very best care.

“It’s not the time to cut health funding, it’s in fact the time to do exactly the opposite, and that’s what our Labor government is doing.”

But Mr Andrews refused to be drawn on whether his government has been too slow to pump money into the state’s pandemic-plagued health system.

“We’ve invested every day of this pandemic, every day, last year’s budget and the budget before had massive investments in health to get us through,” he told Nine.

“Now it’s about repairing the damage that the Covid pandemic has done ... and setting us up for the future.”

Premier Daniel Andrews says the budget aims to help Victoria recover after the pandemic. Picture: Brendan Beckett

The Premier backed Treasurer Tim Pallas’ bold prediction Victoria would record a $650m surplus within four years, in the face of the state’s net debt forecast to hit $157.5bn by 2025-26.

“We’ve got a very clear and absolutely comprehensive fiscal plan,” he said.

“A surplus, $650m surplus in 2025-26, that growth and that being black is incredibly important.

“This is not the federal budget where you’ve got a trillion dollars of debt.”

He said the next federal government will face a “united front” from the state leaders after the May 21 election, as they demand a 50-50 split on hospital funding.

Their pleas have already been rejected by the Morrison government, which is committed to providing 45 per cent of hospital funding, 5 per cent less than they committed during the pandemic.

“If (a 50-50 split) is good enough during the Covid emergency, then it’s good enough during the Covid catch-up,” Mr Andrews told Seven.

“But, as is the Liberal way, they are cutting that health funding and making the job of repairing our healthcare system ... more difficult.”

But the Premier could not confirm he had received a guarantee from Anthony Albanese that a federal Labor government would commit to a 50-50 split.