The Victorian government has unveiled a 10-year fiscal repair plan in its state budget, which will require big businesses, holiday-home owners, and landlords to pay for the COVID-19 debt. The plan includes a “COVID Debt Levy,” which is a two-part tax expected to raise $8.6 billion over the next four years and remain in place until 2033. The levy will impose increased taxes on big businesses and property owners, with businesses with a national payroll of more than $10 million paying an additional payroll tax of 0.5% or 1% if their national payroll exceeds $100 million. The threshold for Victoria’s land tax will also be lowered from $300,000 to $50,000, affecting an estimated 860,000 landowners. The COVID levy targets businesses and property owners who have seen healthy recent profits.
Despite the 10-year COVID debt repayment plan, net debt is still forecast to grow to $171.4 billion in four years’ time, nearly a quarter of the state’s economy. The budget provided billions of dollars in funding for major election commitments made by the government, including significant commitments across health. The state’s budget is expected to climb back to a $2.9 billion cash surplus this year, but a $1 billion operating surplus will not be reached until 2025-26.
The budget includes several measures to ease pressure on small businesses, such as raising the payroll tax threshold from $700,000 to $900,000 from July next year and abolishing stamp duty for commercial and industrial properties. However, foreign property investors will face increased fees, with the absentee owner surcharge rate rising from 2% to 4%.
The budget also includes extra funding for ongoing flood recovery and programs planned to be partly funded by the Commonwealth. It also includes investment in infrastructure, such as building 23 VLocity trains and additional V-Line services.
The opposition accused the government of delivering a painful budget that asked Victorians to pay for the government’s financial mismanagement. The budget has received mixed reactions from various industries and organizations, with some expressing support for certain measures while others have criticized them.
Source: abc.net.au
