Over half of Australian businesses have evaluated Victoria as the most challenging state to do business in the country, adding that they have to pay the highest taxes nationally.
Fifty-five per cent of Victorian firms, which also operate in other parts of Australia, ranked Victoria as the hardest place to do business nationwide.
In contrast, just seven percent of the businesses said the Andrews government was doing very well on slashing the cost of doing business.
The state had the highest local and state tax in the country, with businesses paying 6.2 percent of gross state product, followed by New South Wales at 5.7 percent.
Victoria was also the second-worst place in terms of the number of permits, licenses and regulation items that one needed to start a business, as the state required an average of 43 forms.
The average number of permits required by the Australian Capital Territory was the highest, standing at 45, while the Northern Territory has the lowest requirement of 29 forms.
Four in ten Victorian businesses believed that wait times for government services, including compliance and regulation, were going downhill.
In addition, inconsistent rules or mixed messages between government agencies due to an absence of communication was another problem that some businesses had to resolve.
Concerning affordability and labour productivity, Victoria ranked second last with their tourism gross state product between 2018 and 2019, coming in around $82,273 per worker. Tasmania stood at the bottom of the ranking at $78,950, while NSW had the highest figure at $97,478.
Victoria ranked first for skills and labour, with almost 40% of the population holding a bachelor’s degree or higher.
Nevertheless, there existed a skills mismatch in the Victorian labour market as four in five businesses said they found it challenging to access the labour and skills they needed, especially in entry-level and vocational positions.
The state also came second in entrepreneurship and innovation, with 16.6 percent of new businesses set up between 2017 and 2021, just right behind the ACT, which had a business entry rate of 18.1 percent.
The chamber’s report recognised the impacts of the COVID-19 pandemic on Victoria, saying that the state’s businesses faced more disruption than other places.
Martin Pakula, the industry support minister for Victoria, said the report’s findings revealed the tough pandemic circumstances the state had encountered.
“That’s all been quite different in the last few months. I’ve got no doubt whatsoever that the Victorian economy is going to start roaring back if it hasn’t already,” he said.
VCCI chief executive Paul Guerra said that state and federal governments could help Victoria’s economy rebound, even though the jurisdiction suffered from the highest loss of business days in the country.
“It’s been a really rough two years for businesses,” he said.
“In an election year, particularly this year when we’ve got two elections... we want to see the Victorian economy really stand up and come back strongly.”
The report recommended several solutions to the Andrews government, including establishing a business concierge to facilitate business interaction with the government, conducting a “root and branch” review of the tax system, and speeding up government approvals, grants and programs.
Guerra said VCCI would voice support for a reduction in administrative burden and an innovation to the tax system by state governments before the two elections.
TAX EXPENSES (STATE AND LOCAL) AS A PERCENTAGE OF GROSS STATE PRODUCT 2019-2020
* Victoria - 6.27 percent* New South Wales - 5.72 percent
* South Australia - 5.68 percent
* Tasmania - 5.2 percent
* Queensland - 5 percent
* Western Australia - 4 percent
(Source: Victorian Chamber of Commerce and Industry)
