Manufacturers in Melbourne’s south-east are calling for the state government to put a freeze on its land tax levy until the “unjustified cash grab” has been investigated through an inquiry.
“Most members have experienced a minimum of a 50 percent increase, with some members experiencing anything from up to 300 percent—one member’s land tax has increased up to 1000 percent within a four-year-period,” Ms. Walker told The Epoch Times.
According to SEMMA’s February report, one manufacturer was charged $56,407 in land tax for a $4.1 million land valuation in 2023. Then in 2024, the land value increased to $6.35 million, with the land tax increasing to $120,425.
Land tax in Victoria is assessed annually against a site value—the unimproved value of land—and is determined by the valuer-general. Homeowners who live at their principal place of residence are not charged the land tax, but the land tax applies to those who own two or more properties, vacant land, or commercial properties.
Ms. Walker said manufacturers that have seen a marked increase in their land tax will find it difficult to operate and remain profitable.
“If $50,000 extra in tax means that a manufacturer has to make $450,000 before tax, it’s fast becoming unviable for them,” Ms. Walker told The Epoch Times.
“Will they be able to invest in capital equipment to expand their businesses? The answer will be no. If this land tax continues, will they be able to hire new people? No, they won’t.
Losing Our Manufacturing to China: Director
Ms. Honi said that SEMMA members have been a driving force behind developing Australia’s sovereign capability.“Now, if this land tax continues the way it’s going, we won’t be able to manufacture things here. So we won’t have that sovereign capability.
“We'll be forced to bring things in from overseas and from other countries, as we’ve shown in the past, many pieces of steel and equipment are faulty. They don’t meet Australian standards, and they end up costing us more money.”
Ian Cubitt, managing director of Catten Industries, said the impact of the rising land tax on manufacturers will give other countries the opportunity to profit off the local market.
“Why should we be supporting the Chinese economy at the expense of our economy by taxing ourselves out of it?” Mr. Cubitt told The Epoch Times.
“We want to have local jobs for the local economy and not build an overseas economy up.”
Mr. Cubitt’s business, also in the southeast, saw a 44 percent increase in his land valuation from $1.635 million in 2023 to $2.35 million in 2024.
At the same time, the state government did not explicitly attribute the increase in land tax to the COVID debt levy.
According to the state government, the COVID debt levy is expected to bring in $31.5 billion in revenue for the state, which will be used to pay down the state’s restrictive pandemic measures, or what the Victorian government describes as “one-off investments” that were “designed to protect Victorians and Victorian businesses throughout the pandemic.”
“There’s nothing in the notification; we’ve got to say this is the extra percentage because of the [COVID] levy,” Mr. Cubitt said.
Higher Prices for Customers in the Future: Business Owner
Michael Gilchrist, director of research and development at DSI International, said that developing a local manufacturing base will be difficult if businesses need to pay the increased land tax.This has been echoed by SEMMA and its members.
“From my perspective, the bottom line is that we need something that’s fair and reasonable and not just a smash and grab right now,” Mr. Gilchrist told The Epoch Times, adding that a 5 to 8 percent increase over several years would be reasonable and would not lead to a reaction from business owners.
Mr. Gilchrist said the only way his business will recover the costs is to increase prices.
“Based on my business, the value of the land increased from last year—it basically doubled and the land taxes tripled,” Mr. Gilchrist said.
Tax Collection a ‘Growing Industry’: Libertarian MP
Libertarian MP David Limbrick said the manufacturers he has spoken to want a freeze on the land tax, and more transparency in how the tax is calculated.“Unless we get the government off the backs of manufacturing in Victoria, pretty soon the only growing industry in this state will be tax collection,” Mr. Limbrick told The Epoch Times.
“Every time land tax goes up, manufacturers cannot invest in new equipment, cannot hire new staff or put on additional apprentices, but must raise their prices,” Ms. Vallence said.
Furthermore, Ms. Honi said that the additional costs imposed on businesses, such as the COVID debt levy, increased insurance premiums, and increased gas and electricity prices, need to be reviewed.
“The whole system needs to be reformed. And really, it’s not just statewide, it’s federally. There’s no point in tinkering around the edges. And actually, the land tax should be completely abolished for manufacturers. It’s ridiculous,” she said.
The land tax is expected to bring $5.6 billion in revenue for the state over the next four years.
SEMMA members are scheduled to meet the state Labor treasurer on March 5 to discuss matters related to the land tax, Ms. Honi said.
Victoria’s Department of Treasury and Finance, the Office of the Minister for Jobs and Industry, and the Australian Manufacturers Workers Union have been approached for comment.
