Hard-hit businesses looking for boost in Victorian budget

Business is not only the engine room of our economy, it is also the heart of our communities.

Think about it. Who do you buy your coffee from of a morning? Imagine if they didn’t run their business. That’s not only jobs that wouldn’t exist, it’s suppliers who would have one less customer, a property owner without a tenant and an entity not paying tax to contribute to social welfare, health and education.

Business is not only the engine room of our economy, it is also the heart of our communities.Credit:Wayne Taylor

Put simply, we can’t do it without them.

It’s the Victorian Chamber of Commerce and Industry’s job to champion your local coffee shop, clothing store, hairdresser, small business, medium business, large business. All businesses. Businesses are responsible for eight out of 10 jobs in Australia.

That’s what we did in our state budget submission. We looked at what was hard for businesses in Victoria and put proposals forward that will again make them the engine room of the economy. This is why our submission was centred around three pillars; enabling, growing, and easing the cost of doing business.

When the state budget is handed down on Thursday, we want to see policies that will keep businesses and jobs alive in Victoria. We need a budget that understands that business is the linchpin of the economy and when business does well, so does society, that empowers them to go to the next level on our behalf.

‘We want to see policies that will keep businesses and jobs alive in Victoria.’Credit:AFR

Every budget needs balance between supporting business and ensuring appropriate welfare support. In this budget we must continue to focus on support measures to underpin the ongoing success of business in this state, while providing a platform for social stability. We should all be moving towards prosperity for everyone, and business remains at the heart of that and as the key driver.

On Thursday, we hope to see a Budget that will enable business, grow business and make it easier to do business. We had the ambitious infrastructure bonanza last year, and that was appropriate to stimulate a depleted economy. This Budget should provide an opportunity for us to recalibrate and foster business growth. We are looking for a budget that builds on the strengths of our world-class research institutions, skilled workers and entrepreneurs.

It should create the conditions that business needs to thrive and again be the economic engine room of the economy. The land tax and stamp duty hikes announced on Saturday do not align with that aspiration and were a missed opportunity to swap stamp duty for a fairer and more efficient property tax. We need structural tax reform not just an increase in taxes that will result in more costs that will ultimately be passed on to businesses.

While the recovery is going well, there is still uncertainty ahead. The Victorian Chamber is advocating for an Industry COVID-19 Recovery Fund to provide grants to assist businesses to continue to transform their operations to become more resilient and competitive in the post-pandemic environment.

International education has been our state’s largest services export industry for more than a decade.Credit:Wayne Taylor

We identified a need for funding to help international students re-engage with the Victorian higher education sector remotely and through financially assisting their return to Victoria. International education has been our state’s largest services export industry for more than a decade, and many Victorian businesses rely on this sector. We have to do more to salvage it.

COVID-19 crushed the visitor economy. We know that international travel won’t resume to pre-pandemic levels until 2024, so let’s set ourselves up now to ensure we still have a tourism sector when the world returns to normal. One way we can do that is by investing in a dedicated tourism strategy to better leverage and invest in our world-class natural assets.

Manufacturing has long been the cornerstone of the Victorian economy, providing a diverse range of jobs, boosting exports and significantly contributing to Australia’s economic growth. The evolution of global manufacturing has given rise to new opportunities for Victorian businesses to think innovatively, use advanced technologies, expand research and development and create new partnerships.

The government can help to foster this momentum by establishing a Defence Manufacturing Support Fund to leverage the federal $450 billion, 10-year commitment and creating a space and aerospace cluster. The space economy is expected to be worth $1 trillion by 2035. With the large number of aero and space-related companies Victoria already has coupled with a co-ordinated industry approach, we are in the prime position to take advantage of this.

We shouldn’t forget our exporters either, which is why Global Victoria’s Export Recovery Package to support businesses to diversify and identify new markets needs to be extended, especially during a time of uncertainty with our larger trading partners.

We’d like to see Victoria competitive with other states through the payroll tax threshold being increased to at least $1 million and a reduction in the payroll tax rate to 4 per cent for metropolitan employers and 1 per cent for regional employers to stimulate job creation.

Victoria should be the best place in Australia to live, work, learn, and operate a business and if our recommendations are adopted in Thursday’s budget it will ensure Victoria’s position is guaranteed.

Paul Guerra is chief executive of the Victorian Chamber of Commerce and Industry.

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