The Melbourne CBD. Image by moerschy from Pixabay
Victoria’s new state tax regime has again come under fire, with employer body the Australian Industry Group (known as the Ai Group) labelling a new payroll tax levy as nothing more than a “cash grab”.
The body said it was “shocked” at the approach taken by Government to the employees and customers of the largest businesses in the state.
Victoria’s Government last week announced that businesses with more than $10-million in wages nationally will face a 0.5 per cent levy from 2022.
Larger businesses with a payroll bill higher than $100-million will pay an additional 0.5 per cent on the share of wages paid in Victoria.
“The main concern expressed by business is the lack of consistency,” said Tim Piper, the Victorian Head of the Ai Group.
“They (the State Government) expect Victoria’s consumers, employees and businesses to cough up an additional $800-million, 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,” Piper argued.
The levy, which the Government said would be ‘ring-fenced’ for mental health and affect fewer than 5 percent of employers, was unveiled by Victorian Treasurer Tim Pallas as part of the new 2021-22 State Budget.
Pallas explained that he was asking businesses that “continued to profit through the pandemic” and pocketed taxpayer subsidies to help “deliver a generational reform after one of the most mentally taxing years of our lives”.
But Piper said business was having none of it. “The Government has undone a decade or more [of] 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.
“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,” he said.
Recently the property industry in Victoria has slammed planned property tax hikes in the state as a blow to jobs, investment and homeownership dreams.
Additional land tax, stamp duty and a new tax on property investment and development was roundly condemned by the Property Council of Australia as a “sucker punch”.