The announcement of the Victorian COVID Debt Levy has ruffled feathers with state Member for Euroa Annabelle Cleeland, who says Victorians are paying more while getting less. But looking closer, things are a little more complicated.
The levy aims to pay back some of the state’s debt that was accumulated during the pandemic.
Following the release of the state budget in May, Ms Cleeland held a business round table in Seymour with local industry leaders and Shadow Treasurer Brad Rowswell.
Following the meeting, Ms Cleeland said it was local small businesses, some still recovering from COVID lockdowns and floods, that would bear the brunt of the effort to reel in the state’s debt.
“There’s genuine fear regional Victoria is going to pay the price of the overspending in Melbourne,” Ms Cleeland said.
“This impact will be felt on the 150,000 small businesses in regional Victoria that generate jobs, that generate investment in the productivity capacity of the state, and that provide Victorians with the opportunity they need to get ahead.”
There is no doubt small business has done it tough throughout the pandemic; however, the measure is unlikely to affect local small businesses, as Ms Cleeland claims.
The payroll component of the levy will focus on businesses with national payrolls above $10 million, which accounts for around five per cent of employers statewide.
Businesses with a national payroll over $10 million will pay an additional 0.5 per cent in payroll tax and a further 0.5 per cent for payrolls that exceed $100 million.
The levy is to be paid on amounts above these thresholds, $10 million and $100 million respectively, not the entire payroll amount.
Existing payroll tax exemptions for hospitals and charities will remain.
The levy largely targets extremely profitable businesses that came out of the pandemic stronger than ever, according to a state government spokesperson.
Ms Cleeland described the Victorian Government’s fiscal strategy as “irresponsible”.
“These taxes will impact businesses like Wine By Sam in Seymour, which pivoted during COVID and increased their partnerships and online sales capability while continuing to produce award-winning wines enjoyed by many,” Ms Cleeland said.
However, it has been confirmed by the business owner, Sam Plunkett, that despite being a successful business, Wine By Sam is not of the scale that would be affected by the COVID tax levy.
If fact, the majority of Seymour businesses would not meet the thresholds required to pay the levy.
The government spokesperson said the levy was a temporary, targeted and responsible approach to taxation that would not apply to everyone.
“The budget delivers on every promise made to Victorians at the election while repaying our COVID debt and investing in the jobs and projects that build our state,” they said.