More than half of Australian businesses consider Victoria to be the most difficult state in which to conduct business, with local operators paying the highest taxes in the country.
The Victorian Chamber of Commerce and Industry unveiled its first cost of doing business index on Wednesday, which ranks the cost of doing business in all states and territories throughout the country.
More than half of Victorian businesses with operations in other regions of the country said Victoria was the most difficult state to conduct business in the country.
Only 7% of respondents said that the Andrews government was doing a good job of lowering the cost of doing business in the country.
Businesses in the state paid the highest local and state taxes in Australia, accounting for 6.2 per cent of gross state product, with the next highest rate being 5.7 per cent in New South Wales.
In terms of the number of permissions, licences, and regulations required to start a business, Victoria was the second-worst jurisdiction, with an average of 43 forms required per new enterprise.
The Australian Capital Territory (ACT) required the most permits on average, with 45, while the Northern Territory required the fewest, with 29.
According to a survey conducted by the Victorian Chamber of Commerce, wait times for government services, including compliance and regulation, are increasing longer.
Some firms have reported having to deal with “inconsistent rules or conflicting messages” between government departments that don’t communicate with one another on a regular basis.
In terms of affordability and labour productivity, Victoria was placed second to last, with tourist gross state product between 2018 and 2019 totalling $82,273 per worker, trailing only Tasmania’s figure of $78,950. This is in comparison to the state of New South Wales, which had the highest salary at $97,478.
Victoria was placed top in terms of skills and labour, and it has one of the most highly educated workforces in the country.
Businesses reported that they were having trouble obtaining the labour and skills they required, particularly in entry-level and vocational roles, according to four out of five respondents.
With a firm entry rate of 16.6 per cent between 2017 and 2021, the state was ranked second in entrepreneurship and innovation, trailing only the ACT, which had a rate of 18.1 per cent.
The chamber’s report acknowledged the impact of the COVID-19 pandemic on Victoria, with businesses in the state experiencing greater disruption than those in other parts of the country.
According to Martin Pakula, the state’s Industry Support Minister, the findings highlighted “the extremely tough pandemic circumstances” that the state had encountered.
Since 2002, Melbourne has continuously been in the top three of the world’s most liveable cities, although it lost its title as the most liveable city in the world last year, sliding to eighth position. Saul Eslake, an economist, has cautioned that, following a decade of decline, Victorians have become poorer than residents of any other state or territory, with the exception of South Australia.
In 2019-2020, the following percentage of gross state product is represented by tax expenses (including state and local).
The Victorian Chamber of Commerce and Industry is the source of this information.
In response to the findings presented in the report, VCCI provided eight practical recommendations for government to address the costs and barriers faced by our members.
The recommendations include: