The Victorian Chamber of Commerce and Industry (VCCI) and Committee for Melbourne (CfM) warn that today's State Budget does not tackle the fundamentals business and households need to secure our future competitiveness and prosperity, but opportunity remains to reset course.
While the Budget includes some cost-of-living support and targeted investments, it does not go far enough to address the deeper structural challenges weighing on the State's economy, leaving both businesses and Victorians exposed to ongoing cost-of-living strain.
Critically, the Budget continues to show rising debt levels with no sense of when it will peak and no path to rebuild business and investor conditions and confidence. Without a defined plan, the current trajectory risks placing a sustained and growing burden on future generations of Victorians.
Victoria's economy is underperforming relative to other states, with weak growth in business investment, declining productivity and declining Gross State Product per capita, placing increasing pressure on working families and businesses alike.
There is also limited action to ease the cumulative burden of taxes and regulation on business, despite this being a key barrier to investment and growth. Without a commitment to reduce taxes and a reduction in regulatory pressure, Victoria risks continuing to fall behind more competitive jurisdictions.
A strong private sector is essential to funding the services Victorians rely on. Without it, economic growth slows, investment declines, jobs and incomes are compromised and pressure on households increases.
The Government must urgently turn its attention to fixing Victoria's economic problems. As outlined in our budget submission, this means taking clear steps to:
- Stabilise and meaningfully reduce debt as a share of the economy
- Provide certainty on reducing tax burden and regulatory settings
- Deliver reliable, affordable and secure energy
- Unlock housing supply through meaningful planning and tax reform
- Back skills, education and workforce participation
- Partner with the private sector to unlock investment and productivity
We know that cost of living pressures weighs heavily on Victorian businesses and families. But unless we create the conditions for long-term growth, investment and prosperity, Victorians will continue to bear the brunt of these cost-of-living pressures.
To be attributed to Victorian Chamber of Commerce and Industry Chief Executive, Sally Curtain:
"Budgets are about choices and business wasn't chosen today. This budget addresses some cost-of-living pressures, but it does not deal with the root causes that are making life harder for businesses and households.
"The question is now: what are the next steps to secure Victoria's competitiveness?
"We need a clear plan to get on top of the state's ever-growing debt, easing the cumulative tax burden, deliver affordable and reliable energy and create the conditions for business investment.
"Encouragingly, we have not seen new taxes in this budget but holding the line is not enough. To compete, we need to actively reduce the debt burden and improve the operational environment for business.
"Without that, we risk seeing fewer opportunities, weaker wage growth and declining living standards over time. You cannot fix a structural problem with taxes and top-ups.
"Short-term relief funded on the State's credit card is not an economic strategy. It may ease pressure today, but as every household knows, at some point you have to pay it back – with interest. Victorians will welcome any relief from cost-of-living pressures, but short-term sugar hits are not enough to secure the long-term prosperity of this state, and it adds to the long-term burden that future generations will still be paying off. Debt is the real cost-of-living issue here.
"That's why the focus must now shift from spending to strategy and from short-term relief to long-term growth.
"Working families and family businesses are one and the same. Victorians don't separate their local economy from their daily lives: it's their café, their bakery, their tradie. When those businesses are under pressure, jobs, wages and opportunities are too."
To be attributed to Committee for Melbourne Chief Executive, Scott Veenker:
"This is a Budget that will feel like a missed opportunity for many Victorian businesses. There are positive investments in services and infrastructure, but the broader economic settings remain a concern - and that's what ultimately determines whether businesses invest, grow and create jobs.
"The question is whether this budget puts us on a stronger competitive footing. Right now, that signal is not strong enough.
"Business investment follows confidence and confidence depends on clear fiscal discipline, stable policy and a genuinely competitive operating environment. Victoria's economy is becoming increasingly reliant on government spending rather than private sector growth. That is not sustainable.
"The harder you make business conditions, the harder it is for businesses to invest, pay higher wages and contribute to a more prosperous economy. What's good for business is good for us all.
"Melbourne is competing nationally and globally for investment, talent and jobs. If we are not competitive on cost, regulation and opportunity, that investment will go elsewhere. A strong private sector is ultimately what funds the services Victorians rely on. Without it, the pressure on households will only increase.
"This State Budget should have gone further to create the conditions for long-term growth, because that is what ultimately delivers stronger wages, more opportunity and sustainable improvements in living standards."
