This opinion article by Business Council of Australia Chief Executive Bran Black was published in the Herald Sun on 11 November 2025.
Victoria has finished last in our annual assessment of which state or territory is best for business. Again.
If the state that built Australia’s manufacturing heart is to turn things around, it must start by addressing uncompetitive business taxes and onerous licensing and regulatory requirements that send a clear ‘Wrong way – Go back’ sign to anyone with capital to invest.
The annual Regulation Rumble report is a race to the top for states looking to attract business investment with the smartest and most competitive rules. Right now, Victoria is struggling to get out of the slow lane.
The good news is that some green shoots can already be seen.
The recent planning reforms, the Activity Centre program, and a gradual abolition of insurance duties on professional-indemnity cover highlight greater awareness of the fact that the private sector needs room to breathe.
For the first time, Victoria’s planning system has climbed to fourth nationally, driven by faster approvals and new transparency tools that let applicants track council performance online.
But Victoria is still chasing from the back of the pack.
Payroll tax is one of the most perverse and damaging taxes in our nation. It literally punishes business owners when they hire more people. On payroll tax, Victoria is officially the most punitive state in Australia.
Big employers face a top payroll tax rate of 6.85 per cent after including surcharges – with only the ACT imposing a higher rate. And payroll tax kicks in once payrolls hit just $1 million, the equal lowest threshold in the country.
Every new hire for a growing business costs more, and that shows in the jobs data: for 17 of the past 18 months, Victoria has recorded the highest unemployment rate in the nation.
The link between a hiring tax and fewer hires isn’t hard to grasp. A manufacturer or builder expanding in Adelaide can pay tens of thousands less in payroll tax than if they were operating in Melbourne.
Property taxes tell the same story, with Victoria ranking last for property-tax competitiveness – slugging businesses and homeowners.
If Victoria wants to get serious about winning more business activity and jobs, tax changes need to be at the heart of its plan.
So too must red tape. Regulation Rumble 2025 finds that Victoria requires about two-thirds more licences and regulatory requirements to open a cafe than the Northern Territory and around 50 per cent more than in South Australia. That’s time and money drained from small operators before they’ve even served a coffee.
Yes, there are some positive steps being announced, but to overtake other states in the race to the top for the best business environment, Victoria must go further. Because no state is resting on its laurels. Victoria has the talent, creativity and scale to lead the nation again. We need government to start pulling off the brakes.