Victoria’s treasurer has denied the state budget is steeped in class warfare as the state government targets big business, housing investors and private schools.
Handing down his ninth budget emblazoned with Labor’s “Doing What Matters” election slogan, Tim Pallas defended a 10-year, two-part levy to help repay $31.5 billion in COVID-19 debt.
“Nobody’s engaging in a terminology of class warfare … that is not what’s motivating us,” he told reporters on Tuesday.
From July, Victorian businesses with national payrolls above $10 million – or five per cent of the state’s employers – will pay an additional 0.5 per cent in payroll tax.
Businesses with a national payroll above $100m will pay one per cent in additional tax, with the move expected to raise $3.9b over the forward estimates.
Another $4.7b will be recouped from roughly 860,000 Victorian investment, holiday home or business property owners under land tax changes.
About 110 high-fee private schools will be stripped of their long-standing payroll tax exemption to glean $422.2m over the next four years, while up to 4000 public sector workers will lose their jobs as the government eyes $2.1b in savings.
Industry and advocacy groups have lined up to condemn the measures designed to stabilise net debt, which is projected to hit $171.4b by mid-2027.
The government is using medium to large businesses and property owners as an ATM to pay off the debt, Victorian Chamber of Commerce and Industry chief executive Paul Guerra said.
Australian Retailers Association chief executive Paul Zahra suggested the new and increased taxes were likely to manifest in job losses and increased prices for customers, further fuelling cost-of-living pressures.
Real Estate Institute of Victoria chief executive Quentin Kilian added it would only worsen the current rental crisis facing Victorians.
“This is a tax on families – not the big end of town,” he said.
The frequency of rental increases is regulated in Victoria but not the amount.
“Make no mistake, renters will end up footing the bill. This will exacerbate Victoria’s rental stress,” CPA Australia senior tax policy manager Elinor Kasapidis said.
Independent Schools Victoria chief executive Michelle Green said the removal of the tax-free exemption was likely to have a damaging impact on operations for many schools, causing disruption for students.
Opposition Leader John Pesutto acknowledged the government needed to reduce debt but suggested that could be achieved through cutting infrastructure spending waste rather than targeting employers, schools and people with a property nest egg.
“These are not Ferrari-driving property investors,” he told ABC Radio Melbourne on Wednesday.
Prime Minister Anthony Albanese said he was confident Premier Daniel Andrews could rein in Victoria’s mounting debt without the help of his government.
“They have done an enormous amount to invest in infrastructure. The Victorian economy is growing again,” he told Seven’s Sunrise.
Australian Associated Press