The 2021-22 State Budget is fiscally responsible and will address the need for Victorian businesses to reset and recalibrate in the wake of the COVID-19 pandemic.
The government has recognised that supporting our hard-hit sectors, addressing skills gaps, encouraging female participation, incentivising innovation and harnessing the strengths of our regional economy will be central to our short-term economic future.
We are, however, disappointed that the government will hike up taxes for business and investors to fund core responsibilities in the areas of mental health, education and health while also plugging the cost blowouts on major infrastructure projects. The Budget contains land tax and stamp duty hikes as well as a new Mental Health and Wellbeing Levy, to be paid by businesses that pay more than $10 million in wages nationally from 1 January 2022.
Our submission for the 2021-22 State Budget centred around three pillars of enabling business, growing business and the ease of doing business. The elements of this Budget that align with these themes, include:
- $31 million to support businesses to remain COVIDSafe: this should involve industry groups and organisations
- $619 million for the Jobs Victoria initiative and New Jobs Tax Credit which will both be integral to matching jobseekers with job vacancies
- $40.6 million towards the Jobs First Policy to enable small and medium enterprises to create local jobs in infrastructure, manufacturing and goods and services contracts
- $147 million for the Circuit Breaker Action Business Support Package
- $51 million to support the international education sector
- $788 million to reduce the impact of bushfires on communities, the economy and the environment
- $200 million for the Melbourne City Revitalisation Fund including stamp duty concessions for new dwellings and extending the vacant residential land tax exemption as well as a new voucher scheme and support for the arts and cultural events
- $107 million for the Melbourne Central Business District Economic Package, including the Melbourne Dining Experiences scheme
- $43 million for the Business Events Program
- $160 million for Victorian Tourism and $288 million for the creative sector
- Increasing the payroll tax free threshold from $650,000 to $700,000 (to benefit 42,000 businesses). While this falls short of our submission to increase it to $1 million, it is a shift in the right direction
- Decreasing the regional employer payroll tax rate from 2.02 per cent to 1.2125 from 1 July 2021 (benefitting 4000 businesses)
- $3.8 billion to transform the way mental health care is managed in Victoria
- $595.7 million road and rail infrastructure projects to build on previously-announced projects
- $86 million to establish the Victorian Skills Authority and $209 million for the TAFE and training sectors
- $179 million to deliver the first stage of the transformation of the former GM site at Fishermens Bend into a global innovation HUB
- $50 million to support establishing our capability to produce MRNA vaccines
The Victorian Chamber's 2021-22 State Budget Submission is available on our website: victorianchamber.com.au/news-media/all/2021/04/2021-state-budget-submission
To be attributed to Victorian Chamber of Commerce and Industry Chief Executive Paul Guerra:
"This is a third-year fiscally-responsible budget of restrained, yet targeted spending. It ticks a lot of boxes for business in the areas of job creation, addressing skills gaps, powering innovation and manufacturing and creating more inclusive workplaces for women.
"The Victorian Chamber is pleased that the Budget recognises that COVID-19 has disproportionately impacted certain sectors including the visitor economy, CBD businesses, international education, events and the arts. The Budget also recognises that regional Victoria has led our recovery from COVID-19 with significant allocations to enable those communities to continue on that trajectory. It's a great budget for regional businesses which now have the lowest payroll tax rate in the country.
"Every Victorian will welcome the once in a generation reform to our mental health system and we should not underestimate the flow on effects that a fit for purpose system will have on our society. However, business is once again going to pick up the bill and the Victorian Chamber is concerned about Victoria's credentials as the best place in Australia to operate a business.
"Business is not only the engine room of the economy, they're also the heart of our communities. The State Government needs to stop treating business as a fund of last resort. Business cannot continue to be taxed to fund project cost blowouts.
"Next year, we expect to see a pre-election Budget with a stronger focus on business and jobs which will be needed to propel our economy. Today's Budget was an opportunity missed to change stamp duty for a more efficient and equitable property tax. The Victorian Chamber will continue to lead the advocacy for this structural economic change."
