The head of a prominent industry group has advised against overreacting to startling recent data indicating a significant number of businesses leaving Victoria.
According to the Australian Bureau of Statistics (ABS), Victoria was the only state to experience a decrease in the number of registered businesses during the last fiscal year.
In the year 2022/23, there was a decrease of 7606 registered businesses compared to the previous year. However, New South Wales and Queensland experienced an increase of 11,031 and 8147 registered enterprises, respectively.
According to Paul Guerra, chief executive of the Victorian Chamber of Commerce and Industry, a considerable number of businesses have started operating in the past few years.
“There’s certainly been a drop in confidence, and that is starting to come through with some of the ABS numbers and some of the survey work we are doing,” he told 3AW on Wednesday.
“But let’s not panic, over the past four years, we have actually grown the amount of businesses in this state in total to a significant number.
“Yes, it’s a blip, but it’s not time to panic … it is time to put a floor underneath this and start to look forward.”
In response to the figures, the opposition’s shadow treasurer, Brad Rowswell, said it came as no surprise, considering the harsh economic climate during the Labor administration.
“It’s little wonder businesses are turning their backs on Victoria given the punishing conditions under Labor,” he said.
“The Andrews government has sent Victoria broke and constantly resorts to raising taxes and charges, which is driving businesses from this state.”
ANZ’s CEO Shayne Elliot recently stated that doing business in Victoria was particularly challenging.
In July, he expressed that it was becoming more difficult for companies in Victoria, citing the state’s payroll tax rate of 4.85 per cent.
“It’s one of the toughest places. Look at the payroll tax, why are we taxing something that’s good … we are taxing employers for giving people jobs,” he told 3AW.
“Those costs ultimately get paid for by consumers. That’s the way it works. So you don’t want to be an expensive place doing business.
“I wouldn’t want to be claiming that crown, and unfortunately, Victoria at the moment is claiming the crown of one of the more expensive places to do business in Australia.”
Critics expressed their concern about the state budget that was recently released. They believe that the increased taxes and levies, which were introduced to pay down the debt, might have sent the “wrong message” to Victorians.
According to the Business Council of Australia, the government is considering imposing higher costs on companies operating in the state, which goes against the need to expand the economy.
Mr Guerra agreed the budget was a “difficult pill to swallow” and warned of potential job cuts across the state due to the challenging budget.
And it’s not only businesses but also skilled workers, as it was reported earlier this year that Victoria had been haemorrhaging tradies to the north.
Industry experts claimed Victoria lost over 500 tradies to Queensland over the last two years, while 661 tradespeople moved to Queensland from New South Wales in 2022.
“Other than what’s going on in the home building industry, there’s a lot of civil work going on as well, so there’s demand there,” Michael Roberts from the Housing Industry Association said in April.
Major projects and events are thought to be driving Queensland’s growth.
“Well, it’s a pretty good place to live here in Queensland. There’s a lot of work in the Queensland sector and guaranteed work over the next 10 years with the Olympics and the energy sector,” Anissa Levy, the commissioner of the Queensland Building and Construction Commission, said.