Victoria falls to the bottom as Australia’s least business-friendly state

On December 3, 2024, a report by the Business Council of Australia identified Victoria as the least business-friendly jurisdiction in the country. This assessment was part of the Regulation Rumble 2024 report, which evaluated various states and territories based on criteria crucial for the growth of small businesses. The report highlighted significant issues in Victoria, particularly its competitive property tax settings, payroll taxes, and stringent business licensing requirements, which adversely affect local enterprises and deter economic growth. The findings revealed that nearly 40 percent of businesses in Victoria view time spent on bureaucracy and compliance as a more significant expense than money itself. This inefficiency is compounded by rising costs such as the temporary land tax surcharge associated with the COVID-19 Debt Recovery Plan, along with the recent implementation of the new Commercial and Industrial Property Tax. These growing financial pressures create hurdles for business owners, contributing to an environment that lacks incentives for expansion and innovation. Furthermore, the report indicated that Victoria holds the dubious distinction of the highest payroll tax, land tax, land transfer duty, and job vacancy rates, ranking last for numerous key business metrics. Critics, including Shadow Minister for Economic Reform Jess Wilson, have described these results as predictable given the state's multiple layers of red tape and economic challenges, including the highest unemployment and debt levels in Australia. In contrast, South Australia, Queensland, and Western Australia were cited as maintaining outdated operating environments. The Business Council emphasized the urgent need for a National Reform Fund dedicated to enhancing productivity and facilitating support for small and medium enterprises. Premier Jacinta Allan responded to the report, expressing the importance of addressing bureaucratic obstacles to foster business growth. She pointed to the upcoming Economic Growth Statement, pledging to focus on cutting red tape while prioritizing essential sectors like manufacturing for future workforce development. Despite the government's assurances, there remains skepticism from opponents during a time when business registrations in Victoria have significantly decreased, with many attributing these declines to the government's tax increases since 2014.