Choke hold: The 33 taxes, levies and duties Victorians are paying that have us at tipping point

Sydney Morning Herald

19-05-2025

In contrast to Sydney's congestion tax, retailers are not exempt from the Victorian levy. Vicinity Centres, which manages Victoria Gardens, a Richmond shopping centre which houses one of Melbourne's two Ikea stores, on Monday wrote to tenants informing them that the proposed change would add $4.5 million to the annual running costs of the centre.
'This could have flow-on effects for parking fees, operations, outgoings, and ultimately, customers – at a time when affordability is already under pressure,' Vicinity manager John Nadalin wrote.
'We are deeply aware that this is a regressive tax that will hurt all retailers and the wider community and is counterproductive when we are trying to support our retailers and small businesses post-COVID.'
Honi Walker, the chief executive of the South East Melbourne Manufacturers Alliance which represents about 235 manufacturing businesses, said land tax increases announced as part of the government's plan to repay debt incurred during the pandemic had hit her members hard.
According to figures compiled by SEMMA, the family-owned Catten Industries, a husband and wife-run sheet metal manufacturer which employs 40 people, had seen its land tax bill increase by almost 230 per cent from $13,500 in 2023 to $31,000 this year.
Owner Ian Cubbitt said the increase was due to the appraised value of his Bayswater factory and the land beneath it. 'It sounds like we are crying poor, but you have to find this money from somewhere, and it affects our ability to invest in equipment or people and skills and the things we need,' he said.
One of the business's largest contracts is to supply sheet metal parts to make 100 next-generation trams for the Victorian government. 'We are finding it difficult to compete against overseas suppliers,' Cubbitt said. 'If the cost to produce here keeps going up, it makes it really difficult for them to look locally to buy.'
Jaclyn Symes on Monday said there would be no new taxes in her first budget and no tax increases beyond those already forecast to rise. She claimed a previously announced, 12-month extension of a stamp duty exemption for off-the-plan purchases of apartments and townhouses was a tax cut and said the budget would contain measures to reduce the cost of regulatory compliance to business.
'There is nothing in the budget that changes the tax settings,' Symes said. 'That is what business has told me is important – no new taxes and making things easier to do business in the state of Victoria. That is what you will see.'
Symes said the budget would reflect initial savings identified by former Department of Premier and Cabinet secretary Helen Silver in her interim report into the size and efficiency of the Victorian Public Service. Silver's final report will be handed in after the budget.
Shadow treasurer James Newbury said while Victoria had a more narrow tax base than other states with large resource industries, its punitive tax regime was 'choking' parts of the economy.
'Victorians think we are paying too much tax, and we pay more tax than anywhere else,' said Newbury, who commissioned the PBO study of Victoria's state-based taxes. 'The government's need for more revenue is cannibalising economic outcomes.'
Newbury said that his budget reply speech, to be delivered next week, would start mapping out the opposition's plans to rebalance Victoria's tax take. 'When it comes to tax, we need to talk about not only what we think is wrong but start offering solutions to fix it.'
Guerra said that Victoria's over-reliance on business and property taxes meant the entire tax system needed to be reviewed. 'Depending on who you listen to we may or may not be performing better than other states but who cares?' he said. 'There is investment wanting to come into Victoria that won't while the tax regime is where it is at and the debt situation remains unaddressed.'
This financial year's total tax take is expected to top $39 billion. Of this, $18.2 billion is forecast to be generated from property taxes. The state's tax take is about 6 per cent of gross state product – above all other states.
Charter Keck Cramer researcher Richard Temlett said that since it was first elected, the Victorian government had imposed 29 new or increased taxes on the property sector, making it Australia's most heavily taxed property market.
'I am constantly hearing from investors that they are attracted to Victoria but are not investing because of the higher taxes and charges and now the greater levels of sovereign risk when compared to other states and territories,' he wrote on LinkedIn.
'Many of the tax policies and changes implemented by the state government to date have been reactive and regressive. They appear to be based on the assumption that property prices will keep rising and that developers and investors can afford these taxes.'
The budget will forecast a skinny, $600 million operating surplus for 2025-26 – about $1 billion less that forecast six months ago – and healthier operating surpluses for the forward estimates but confirm that Victoria's overall fiscal position will remain in deficit due to the size and cost of the government's major infrastructure projects.
Net debt is forecast to top $155 billion by July 1, according to the most recent budget update. The Treasury Corporation of Victoria, the independent agency which manages the state's debt, last month reported $200 billion in total borrowings. This covers the combined debt of Victoria's government sector, public non-financial corporations and public finance corporations.
Ratings Agency S&P Global Ratings said while Victoria's budget position remained weak, it expected to see small operating surpluses forecast in the budget papers and for debt to rise at a slower rate than in recent years. S&P Global analyst Rebecca Hrvatin said fiscal discipline would be key to maintaining the state's AA credit rating.