Victorian Treasurer Tim Pallas today handed down the Andrews Government’s 2020-21 State Budget, delivering initiatives which support a jobs-led economic recovery, putting Victorian business and workers first and backing local business.
The Victorian Chamber of Commerce and Industry commends the Government on listening and responding to business’ needs and direct feedback from the Chamber on behalf of its members. The budget reflects the Chamber’s pre-budget submission and continued advocacy on behalf of members.
The budget puts local business at the forefront of Victoria’s recovery, targeting spending to industry, innovation, skills and training, and is underpinned by significant investment in new infrastructure projects and maintenance. Key measures for business include:
· $1.5 billion in tax relief, including a new jobs tax credit that will offset payroll tax for businesses that rehire and bring on new staff, and $250 million to partner with employers to help cover the wages of at least 10,000 new workers in regional Victoria
· $1 billion in TAFE for 80,000 training places
· $300 million to encourage foreign investment
· $2 billion for the Melbourne Arts Precinct and the Victorian Tourism Recovery Package
· $33.4 million to support the recovery for international students
· $2 billion Breatkhrough Victoria Fund
· More than $10 billion for road, rail and social housing
· Support for small business to grow and participate in the recovery
· $626 million for a range of digital infrastructure and skills that will tackle regional connectivity
This is the highest spending budget in Victoria’s history and it is clear that it is intended to help get Victoria back on track. The focus on infrastructure is welcomed and will ensure that the state has the roads, rail and social infrastructure, including housing and hospitals, needed to support all Victorians.
The Government has sensibly targeted emerging industries, while also supporting current industries to renew. This is essential in an even more globalised environment and as opportunities emerge in the post COVID recovery. This will ensure that Victoria is able to reclaim its global reputation as a place to live, travel and do business, one of the key advocacy areas of the Victorian Chamber.
Despite the pro-business measures announced, the threat of a new tax on business and jobs via the announcement of the Secure Work Pilot could potentially derail Victoria’s business environment and recovery. The Victorian Chamber has been invited to be a part of the consultation process and will provide feedback on the creation of the pilot, with our member’s interests firmly in mind. The Chamber will not support any additional cost, impost or taxes on business.
The Budget’s significant investment in spurring economic activity comes at a cost with an operating deficit of $23.3 billion in 2020-21 and $6.8 billion in 2023-24. Net debt will reach $87 billion this year and will grow to $155 billion by June 2024. This debt must be managed carefully to ensure expenditure growth does not exceed revenue growth. The Chamber has consistently supported spending but not where it compromises the state’s AAA credit rating.
Such large spending creates substantial delivery risk. It is essential that Government delivers these projects in partnership with business and also ensures that there is an environment in which business is encouraged to invest. This will require less regulation, less cost, more skilled, job ready workers and more university-industry connections.
To be attributed to Victorian Chamber of Commerce and Industry Chief Executive Paul Guerra:
“This is a once in a century budget for a once in a century pandemic. This is a high spending budget with a focus on infrastructure and jobs that will help the Victorian economy recover quickly and place it in a good position to take advantage of emerging opportunities in post COVID world.
“The Victorian Chamber advocated for initiatives across three key themes: protect and grow local jobs, rebuild our global reputation and define and implement the next big build and the Government has clearly listened.
“The budget is underpinned by an incredible level of spending and borrowing, which is necessary but only up to a point that does not risk Victoria’s prized AAA credit rating. We will carefully watch the response of rating agencies and expect the Government to quickly act to restore our rating if it is reduced.
“With so many projects underway and planned, delivery risk now looms large, We will look to the Government to partner with the private sector to deliver projects on time, and that means creating an environment is conducive to business with less regulation, less cost, more skilled, job ready wrokers and more university-industry connections.
“Businesses continue to carry payroll tax debt that has incurred but deferred and we are disappointed this was not waived in the budget.”