Victoria ranked worst for business as Labor debates brand damage in Albanese stronghold
The Business Council of Australia ranked Victoria the worst state or territory for business. (ABC Far North: Miriam Mazurek-Kaminska)
In short:
A Business Council ranking of states and territories has crowned South Australia the best place in the country to run a business and labelled Victoria the worst.
The rankings could hurt federal Labor if Victorian voters blame it for the state's deteriorating business performance.
What's next?
The Coalition is understood to be planning an end-of-year campaign blitz in the state as the Liberals target several key seats.
Victoria has been labelled the worst jurisdiction in the country to open a new business because of high property taxes and a thicket of red tape that requires cafes, childcare operators and retailers to apply for more licences than in almost any other state.
The poor ranking in this year's annual Business Council of Australia (BCA) review of taxes and regulations found the Labor-run state had the nation's "worst business settings" and the "most work to do in improving its business fundamentals".
Victoria's poor showing contrasted with Labor Premier Peter Malinauskas's South Australia, which was crowned the best place to open a business and hire workers.
Traditional rival New South Wales was in the mid-field, ranked fifth ahead of Queensland and Western Australia.
The best places to do business after South Australia are Tasmania, the ACT and the NT, according to the review.
The Business Council's findings will add to an emerging debate inside the federal government that Victoria's declining state Labor "brand" could be starting to hurt Prime Minister Anthony Albanese.
Some federal Labor MPs have questioned whether Anthony Albanese's prospects in Victoria could be harmed by the state's government's performance. ( ABC News: Matt Roberts )
Federal Labor won 24 of the state's 39 federal seats at the 2022 election, and it will face voters before Victorian Premier Jacinta Allan does in late 2026.
At least one federal minister told the ABC this month that they believed Victoria was shaping up to be one of the most important battlegrounds of the coming campaign.
While South Australia is riding high, according to the BCA rankings, it has relatively few seats up for grabs, unlike in Victoria.
Prospects of a major mood swing in Victoria have also emboldened federal Liberals, who are understood to be planning a major campaign blitz led by Opposition Leader Peter Dutton before the end of the year.
The Liberals, led by Peter Dutton, are considering a campaign blitz in Victoria before the year's end. (AAP: Julian Smith)
Victoria lagging after long COVID
Victoria's economy has struggled to keep pace with states such as South Australia and NSW since the state government raised taxes to help manage a surge in debt that began to skyrocket during some of the world's toughest and longest pandemic lockdowns.
The BCA's findings are based on 10 key factors, ranging from payroll taxes to retail hours, planning systems, efficiency and consistency.
After last year introducing a land tax surcharge to pay for COVID-19 debt repayments, the Allan government now oversees the third-highest land tax rate and the highest stamp duty rate.
It is seventh for payroll costs and sixth for workers compensation insurance.
But it is future entrepreneurs who face the biggest paperwork hurdles in Victoria, with cafe operators requiring 36 licences compared with 22 licences in the Northern Territory.
Similarly, childcare services operators need 35 different approvals, whereas in the NT it is 19, according to the BCA.
Retailers opening clothing and footwear shops require 27 in Victoria, or more than double the 13 required in Queensland.
"Victoria has some of the least competitive property tax settings, payroll taxes and business licensing requirements in the country — it fundamentally needs to look at how these are holding back its economy," BCA chief executive Bran Black said.
South Australia topped the rankings, according to Mr Black, for having the best regulatory environment in the country.
"This was largely driven by it having lower payroll taxes, lower property charges and less voluminous business licensing," he said.
"South Australians have made it clear that they want their state to be destination number one for business, and other jurisdictions need to take note if they want to remain competitive in attracting business investment."