Victorian budget offers ‘little support’ to struggling businesses: CPA
The Victorian budget spared investors from further taxes and levies but offered limited support for beleaguered businesses.
Many Victorian families will receive a welcome cash boost from Treasurer Tim Pallas’ 2024 budget but it will do little to support struggling businesses in the state, according to CPA Australia.
CPA Australia said while cost-of-living pressures are undoubtedly hurting households, the regulatory environment, weak economy and cost of doing business have created a perfect storm that many businesses are struggling to withstand.
The accounting association said small and medium-sized businesses are feeling overwhelmed by red tape at a time when they need to focus on running their business, not complying with new obligations.
“Federal, state and local governments need to take a holistic view of the regulatory impact they are having on business,” said Gavan Ord, business investment and international lead at CPA Australia.
“New regulation, when considered in isolation, often looks reasonable, but when it’s added to every other regulation and business challenge, it can become overwhelming.”
CPA said it was “disappointing” that this year’s budget did not include any measures to alleviate business costs and ease the regulatory burdens being placed on businesses.
The association noted, for example, that payroll tax remains a significant bugbear for Victorian businesses.
“While the government will continue with its proposed increases in the payroll tax threshold announced in the last budget, the threshold at which Victorian businesses start to pay payroll tax still remains the lowest in the country,” it said.
“Further, the increase in payroll tax rates for large businesses to pay for COVID debts and the mental health and wellbeing services remains.”
CPA warned that taxpayers are also likely to see a more active State Revenue Office as it receives extra funding to expand its compliance activities.
“The budget did include a small increase in funding to improve toolkits that help build business skills. This may help a little but much more is needed,” it said.
CPA Australia’s Asia-Pacific Small Business Survey found that Australian small businesses lag their counterparts across the Asia-Pacific region in technology uptake, innovation, business management and exporting.
“Small programs announced in the budget are nowhere near sufficient to move the needle on small business performance,” said Ord.
“As accountants, we fully understand the financial situation the Victorian Government faces, however the case to further increase public investment into programs that build the skills small businesses need for growth and improved productivity is strong.”
Unlike last year’s budget, investors were not hit with new or increased taxes and levies.
The Victorian Chamber of Commerce and Industry said while it welcomed the fact there were no new taxes on business announced, allowances for business in the Budget were modest.
The Chamber welcomed the increased funding for TAFE and upskilling, careers counselling in schools, business events attraction, innovation and entrepreneurship initiatives, regional services and business enablement and training programs.
“The Victorian Chamber’s number one ask of the Victorian Government in his Budget was no new taxes on business. We are pleased that there is no major hit for business in this Budget,” said chief executive Paul Guerra.
“It is pleasing that the Government has committed to reigning in spending and has a plan to address our State’s ballooning debt and a path to achieve an operating surplus. It is imperative that Government is disciplined and focused on staying this course because the State’s substantial debt remains of concern.”
Tax exemption for land used for social housing
The budget also provided some small wins for housing with the Allan government delivering a standalone tax exemption for land used to provide social housing and $11.5 million for the Victorian Aboriginal Housing and Homelessness Framework.
CHIA Vic chief executive Sarah Toohey said the budget builds upon the work the Victorian government has already been doing to improve the housing crisis.
“Securing a land tax exemption for social housing locks in the right system settings to grow the community housing sector and deliver more homes but much more funding for social and affordable housing will be required to build our state out of the crisis,” said Toohey.
“With more than 146,000 Victorian households struggling to afford or secure appropriate housing, the Government must continue to build on its budget strategies and the progress and legacy it’s made through the Big Housing Build.”
