Vic is the toughest place to do business in Aust | Flinders News

More than half of Australian businesses ranked Victoria as the most difficult state to do business in, with local operators paying the highest taxes in the country.

The Victorian Chamber of Commerce and Industry released its first index on Wednesday ranking the cost of doing business across all states and territories.

Fifty-five per cent of Victorian businesses operating in other parts of the country said Victoria was the most difficult place to do business in Australia.

Only seven percent thought the Andrews government was doing a good job of reducing the cost of doing business.

Businesses in the state paid Australia’s highest state and local tax, at 6.2% of gross state income, with NSW the second highest at 5.7%.

Victoria was the second worst jurisdiction for the number of permits, licenses and regulatory items needed to start a business, with an average of 43 forms required.

The ACT required the most permits on average, at 45, while the Northern Territory has the fewest, at 29.

Almost 44% of Victorian businesses said wait times for government services, including compliance and regulations, were getting worse.

Some companies said they had to resolve “inconsistent rules or conflicting messages” between government agencies that don’t communicate with each other.

Victoria was ranked second to last for affordability and labor productivity, with a gross state tourism product between 2018 and 2019 at $82,273 per worker, behind Tasmania at $78,950. This is compared to NSW which was the highest at $97,478.

Victoria ranked first for skills and manpower, with one of the most educated workforces.

However, four in five companies said they had difficulty accessing the labor and skills they needed, especially in entry-level and vocational training positions.

The state was ranked second for entrepreneurship and innovation, with a business entry rate of 16.6% between 2017 and 2021, below the ACT at 18.1%.

The chamber report acknowledged the impact of the COVID-19 pandemic on Victoria, with businesses in the state suffering more disruption than elsewhere.

Industry Support Minister Martin Pakula said the findings reflected “the very difficult pandemic circumstances” the state had faced.

“It has all been quite different over the past few months. I have no doubt that the Victorian economy will start to roar again, if it hasn’t already,” he said.

VCCI chief executive Paul Guerra said while Victoria has lost more business days than any other jurisdiction, state and federal governments can help the local economy rebound.

“It’s been a really tough two years for business,” he said.

“Election year, especially this year when we have two elections…we want to see the Victorian economy really pick up and come back strong.”

The report recommended that Victoria develop a corporate concierge to streamline business interaction with government, implement a “root and branch” review of the tax system, and expedite government approvals, grants, and programs.

Mr Guerra said the VCCI would advocate for governments to reduce the administrative burden and “innovate” the tax system before the two elections.

The report collated the results of roundtables and a survey of 746 members of the Victorian Chamber, including 288 members who operate out of state.

TAX EXPENDITURE (STATE AND LOCAL) AS A PERCENTAGE OF STATE GROSS REVENUE 2019-2020

SOURCE: Victoria Chamber of Commerce and Industry

Australian Associated Press

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