Flat White

It’s bad enough in Danandrewstan without lockdown

27 May 2021

10:59 AM

27 May 2021

10:59 AM

When Victorian Treasurer, Tim Pallas delivered his budget last week, he spoke of a Victoria defined by relief and joy. He also outlined his “fiscal plan”, claiming the first step of job creation, reducing unemployment and restoring economic growth as already achieved.  

In an attempt to draw funds to pay for his ongoing out of control spending, his budget is targeting businesses who are still struggling to get back on their feet after state-wide lockdowns that lasted most of last year as part of the Victorian government’s COVID-19 management plan. They are the big winners, of course, if they have managed to survive.  

With the slogan “we are all in this together” still ringing in the ears of Victorians, public servants will continue to enjoy annual pay rises and generous financial work from home perks while businesses get slogged with increasing tax hikes.  

Talk about robbing Peter to pay Paul. 

The public will not hear about state debt recovery or the projects which could have been funded by the state government’s $3.6 billion infrastructure blowout, nor the steadily rising public sector wage bill, forecasted by economists to soar to near $30 billion by 2023. When it comes to these things, there is money to burn.  


But what the public will hear about is if businesses are able to provide employment to the tune of $10 million, they must be doing well and therefore should cough up more in tax to fund projects like a new mental health system.  

What this government fails to understand is that a big payroll bill doesn’t necessarily mean a lucrative bottom line.  

The government’s plan to increase payroll tax on medium to large businesses will only stunt job creation and employment security and, in turn, slow down economic recovery.  

Hiring employees already comes with a great number of financial considerations from the overall cost of entitlements laid out in well-intentioned but burdensome industrial awards and enterprise agreements, to an increase in the expensive workplace insurance under an uncompetitive state-owned WorkCover system which should be privatised.  

Payroll tax is an added scourge on businesses across the board and consequently, employment so it, along with any other employment killing taxes should be abolished entirely.

And for a government with a strong record of fiscal irresponsibility, particularly when it comes to overspending taxpayers’ money, it’s only a matter of time before the threshold for payroll tax increases is lowered.  

Businesses are key to driving economic recovery. The state needs more people off welfare, less people living off the public purse and this is only achieved by incentivising private enterprise to create jobs. More people working means more people are paying tax and the economic burden becomes a responsibility of all, not a few.  
 
This is not possible under crippling tax hikes.  

Pallas may claim the budget is focusing on those hardest hit by the pandemic but in reality it is draining resources from those most affected. Businesses and employees.  

If there are any winners from the pandemic, it is the political class and the bureaucrats who continue to enjoying job security and wage increases, not the businesses struggling to stay afloat in and out of lockdown.  

And it’s time they paid their share. 

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