Ai Group has described State Government’s new payroll tax levy imposed on Victorians as a “cash grab”

“Business is shocked at the approach taken by Government to the employees and customers of the largest businesses in the State. The extra levy will impact most directly on them. Its indirect impacts extend to the level of private sector investment and employment in the State and because of that will harm the broader Victorian economy,” Tim Piper, the Victorian Head of the national employer association Ai Group said today.

“The main concern expressed by business is the lack of consistency by State Government. They expect Victoria’s consumers, employees and businesses to cough up an additional $800 million each year, while the Government itself has not created efficiencies to make way for its new priorities. The most significant issues are that Government continues to preside over infrastructure cost blow-outs and its steeply increasing public service payroll, while expecting Victorians to bear the impacts of a new levy on employment,” Mr Piper said.

“The Government has undone a decade or more good work by the Bracks and Brumby Governments which reduced payroll tax in the State. This Labor Government is not encouraging business to Victoria, rather it’s issuing an invitation for companies to look elsewhere.

“There is little or no explanation as to what government is doing to contribute itself to reforming and dealing with structural difficulties within the budget.

“Victoria is less competitive today than it was yesterday. This is more than a levy: it is a permanent tax hike. It’s not innovative – in fact most economists would describe it as politically-driven.

“Business accepts that funding needs to be provided to mental health and is willing to play its part. But it also believes there should have been a more even spreading of the load and in particular called on the State Government to share the pain and to make sure that its own costs do not blow out,” Mr Piper said.

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