Today’s State Budget will cut the cost of doing business in Victoria during a period in which cost pressures have intensified.

 

The State Government in its 2006/07 Budget has announced a trifecta of business cost relief, including $533 million worth of payroll tax relief, $167 million worth of land tax relief and a $170 million cut in WorkCover premiums.

 

“These measures counteract some of the increased cost pressures faced by business in recent times, including fuel price rises and an interest rate rise, a situation compounded by a relatively high Australian dollar and a slowing domestic economy”, says VECCI CEO, Mr Neil Coulson.

 

“Payroll tax adds around $1750 to the cost of employing each person in Victoria and VECCI asked for this tax on jobs to be cut in its Pre-Budget submission - this request will be delivered, with payroll tax falling from 5.25 percent to 5 percent phased in over the next three years.

 

“Land tax cuts were also on VECCI’s agenda - the announced cuts are focussed on the middle and the upper brackets where businesses have felt the squeeze associated with rising land values.

 

“VECCI has also observed that the profitability of the Victorian WorkCover Authority’s employer-funded scheme should pave the way for further premium reductions - as a result of this Budget, WorkCover premiums will fall by an average of 10 percent, which will benefit industry as a whole.  This is the third successive cut in WorkCover premiums we have secured for Victorian business in as many years.

 

“The hard targets for red tape reductions are directly aligned to our recommendations and will assist businesses become more efficient in their day-to-day operations - measures include limiting the dollar impact of new regulations by cutting old regulations and moving to cut paperwork by 15 percent over 3 years.

 

“Another positive measure is the strong Budget surplus figure of $316 million for 2006/07, followed by surpluses averaging $316 million over the next three years.

 

“We note, however, that while infrastructure gets a boost, there is no money provided for channel deepening capital works - for Victoria to be truly globally competitive, an early start to channel deepening, with a significant Government funding contribution, needs to remain a key priority”, says Mr Coulson.