Victorian Treasurer Tim Pallas unveiled a fiscally responsible State Budget to reduce the deficit over the next four years which was incurred in response to the COVID-19 pandemic in 2020. As well as investing billions in sectors hardest hit by lockdowns, mental health, health and education, the State Budget will help many businesses reset and recalibrate in our economic recovery.
Navigate our interactive flipbook below for all the information, analysis and insights that your business needs to know from the 2021-22 Victorian State Budget.
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To download a copy of the above flipbook, head to the Additional Resources section below.
While the Victorian Chamber welcomed many of the initiatives in the 2021-22 State Budget, we are disappointed the government will increase taxes for business to fund the government’s core responsibilities in mental health, education and health while also plugging cost blowouts on major infrastructure projects.
Shortly after the release of the State Budget, Victorian Chamber Chief Executive Paul Guerra said, “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.
“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 important structural economic change.”
In April 2021, the Victorian Chamber put forward more than 60 recommendations for the State Government to consider – all of which followed three key themes:
- enable business
- grow business
- make it easier to do business
The Victorian Chamber is delighted to see the Victorian Government accept many of these recommendations, including:
- $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
- 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).
- Improving the efficiency of regulation with further funding for initiatives such as Streamlining for growth.
The 2021-22 budget has revised down the level of deficits over the next four years following the massive spending to support businesses and the public during the COVID-19 pandemic in 2020-21.
In the coming four years, the Victorian Government plans to reduce Victoria’s deficit from $11.6 billion in 2021-22 to $2 billion by introducing various revenue-raisers, including a forecasted $2.4 billion in property taxes.
Businesses with payrolls of more than $10 million will be also hit with a 0.5 per cent Mental Health and Wellbeing Levy from 2022 to fund improvements to Victoria’s mental health system. Larger businesses with payroll more than $100 million will pay an additional 0.5 per cent.
Advocacy and support
For more information on the Victorian Chamber’s advocacy work, visit the Policy and Advocacy section of our website.
If you have any questions or would like to be involved in our advocacy work, please contact firstname.lastname@example.org.