Login
iscover
The release of the Victorian budget is set to leave struggling businesses without the tax relief they desperately want and need, according to CPA Australia.
Victorian budget proves ‘controversial’ for SME community
22 May 2025
•
9 minute read
The accounting body has said the Victorian budget will be well received by many Victorian families, while small businesses will remain “sidelined and frustrated.”
With the budget announcement, the Victorian state government committed to delivering the economic growth statement as a critical first step in “restoring business confidence and driving private sector growth”.
You’re out of free articles for this month
To continue reading the rest of this article, please log in.
Create free account to get unlimited news articles and more!
The budget did not introduce any new business taxes, which was welcomed by the SME community; however, the introduction of the Emergency Services Levy was flagged as “controversial”.
Gavan Ord, CPA Australia’s business investment lead, said: “It has come to something when the confirmation of no new business taxes is presented as good news”.
“Though a period of stability and no new tax shocks is welcome and coincides with the much-needed cut to official interest rates, the conditions under which Victorian businesses operate remain incredibly challenging,” he said.
“The Emergency Services and Volunteer Fund levy, announced in December, is an example of an added financial burden on Victorian property owners that further compounds the difficulties for businesses across the state.”
Several programs aimed at building small business capacity were included in the budget, yet their scale was limited, according to CPA.
Ord noted that to effectively support the small business sector, state and federal governments needed to place a higher priority and more funding behind policies that backed business investment and innovation.
The return to an operating surplus was an “encouraging sign” that would hopefully help ease pressure on Victorian taxpayers, yet according to Ord, the budget also failed to show fiscal restraint.
Ord said the budget had been “fattened” by a $5.7 billion increase in Commonwealth grants, which were being spent on pre-election sweeteners, rather than reduced tax rates.
“Many Victorians will not realise that they already pay more in taxes than people in any other state of territory,” he said.
“The cost-of-living relief provided in the budget is largely down to the extra funding Victoria is receiving from federal government grants in the next 12 months. We need to revitalise the business environment by removing unnecessary regulatory burdens and supporting entrepreneurship.”
BDO Australia echoed a similar sentiment to CPA, noting that while the 2025–26 Victorian budget avoided broad-based tax hikes, it introduced a controversial new emergency service levy.
The government claimed the levy would have the effect of boosting funding for disaster response and emergency services, yet “sharp criticism” was drawn from farmers, firefighters and local councils as they argued it was “unfair and poorly targeted”.
According to BDO, it was expected that the new measure would raise an additional $2.1 billion over three years and local councils would administer and collect the levy from 1 July 2025, making property owners across the state liable.
BDO said the rates would vary depending on land use and value, with some rural communities facing an increase of up to 150 per cent.
Michelle Bennett, BDO tax partner, said that though the absence of new, widespread taxes was a relief, the Emergency Services Levy represented a significant new cost for many.
“The reality is this new levy is another tax increase for rural landholders, already dealing with drought conditions and a challenging global trade environment,” she said.
“The burden is being shifted in a way that risks penalising those least able to absorb it, and many already invest directly in private infrastructure or contribute to local volunteer groups in a way that makes a real contribution to the needs of their community.”
The budget also included $11.1 billion in healthcare spending, with $9.3 billion of this going to hospitals, free public transport for children and a pause or scale-back of major infrastructure projects in a bid to curb spending and return to surplus.
Bennett added that more meaningful stamp duty reform remained “frustratingly slow”.
“The shift into the new Commercial and Industrial Property Tax regime still comes with a final up-front stamp duty hit – and while the extension of the off-the-plan exemption is welcome, more fundamental structural reform is still needed.”
You need to be a member to post comments. Become a member for free today!
