Wednesday, 4 March 2026

 John BERGER (Southern Metropolitan) (14:06): I rise today to contribute to the debate on this motion relating to the important role that small business plays in our economy here in Victoria. I would like to take the opportunity to acknowledge my good friend in the other place Minister Suleyman, who has served our state as Minister for Small Business and Employment, supporting small business and helping to keep our business environment competitive.

Of course no small business owner wants to survive off government subsidies. They want to trade and grow based off goods and services which they are providing to the marketplace. The role that can be played by government in order to help facilitate this and make conditions more favourable to small business activities includes things such as helping to bring more people into the places where businesses operate. For example, in February the minister announced the multicultural business precinct revitalisation program grant recipients, investing over $6 million into supporting our small businesses across the state. These grants will help to update shopfronts and make our high streets more attractive, improve local infrastructure to make it more accessible and invest in these public spaces to create a greater sense of community. This is not a handout to businesses who cannot survive on their own; these are smart investments which help to create local areas with more character and an improved environment in which to do business. In the Southern Metropolitan Region we have a number of locations receiving grants from this program, including Bay Street in Port Melbourne, Chapel Street in Prahran, the Oakleigh activity centre and more.

I have drawn on the multicultural business precinct revitalisation program as only one recent example of how the Allan Labor government is supporting the small businesses which help make our communities such great places to live. It is an important example, but so too are the range of other measures which have been taken by this government across a number of ministerial portfolios which are benefiting small businesses and making it easier for them to do business. One reform that has significantly benefited small businesses are the changes which have been made over recent years to payroll tax. These reforms began under the former Treasurer Tim Pallas, who served our state in that role for a decade, and they have continued under the current Treasurer Minister Symes. On 1 July 2024 we increased the payroll tax–free threshold from $700,000 for annual returns to $900,000. At the beginning of the current financial year, on 1 July 2025, we increased it to $1 million for annual returns. The increase of the threshold to $1 million means that 6000 businesses who were previously paying payroll tax are no longer obligated to do so. Further, it means that 22,500 businesses are paying a reduced rate.

The current base rate for payroll tax in Victoria is 4.85 per cent. I would, however, like to note that in 2017 the former Treasurer Tim Pallas successfully implemented a lower rate of payroll tax for regional Victoria. Today the regional rate of payroll tax sits at 1.2125 per cent, a low rate which is helping to create a positive environment to do business in the regions.

Increasing the payroll tax–free threshold was not the only pro–small business reform which was brought in at the beginning of this financial year. A number of other reforms have come through as part of a prudent and growth-focused deregulatory agenda, cutting red tape and making it easier to open or expand a small business.

One set of significant reforms, which came into effect at the beginning of the financial year, are the changes which we have made to liquor licensing. Previously small businesses seeking to serve liquor were obligated to apply for both a planning permit from their local council and a liquor licence from the state government through Liquor Control Victoria. Now businesses are no longer obliged to receive the planning permit; they must demonstrate they are not contravening the existing planning scheme. This reform will take up to $7000 off the cost of starting a hospitality business and will allow businesses to open as early as six months sooner. Making it easier for businesses to open and grow is good for economic growth, good for creating more jobs, good for government tax revenue and ultimately good for local communities, who will benefit from having more bars and more restaurants opening sooner. These reforms are a continuation of other liquor regulation reforms which were carried out during the then Andrews government.

Previously, many areas in the eastern suburbs were designated dry suburbs, in which no pubs operated and where restaurants historically either were not able to sell alcohol or faced an additional regulatory burden and bureaucratic challenge in seeking a liquor licence. This was a regulation which had been brought about in the 1920s. For context, this is the same time when across all of America all alcohol sales had been made illegal under the constitution. In recent decades, however, a number of restaurants in these dry suburbs have been successful in obtaining liquor licences and have demonstrated demand among local residents for liquor service in their local restaurants. Further, this also demonstrated that liquor could be served by a restaurant without damaging the character of these neighbourhoods. As such, by the time the Andrews Labor government got around to reforming these outdated laws, it was widely welcomed by the business community in those areas. Since then suburbs in my constituency of Southern Metropolitan Region such as Surrey Hills, Camberwell, Balwyn, North Balwyn, Ashburton, Glen Iris and Canterbury have all seen new restaurants and bars popping up and serving these communities. Reforming the outdated dry suburb laws has been a significant success for Victorian small businesses in my electorate.

Further reforms to liquor licensing which came in at the beginning of the current financial year are benefiting the entire state. Other reforms which are benefiting small businesses in my constituency and across the state include permanently removing the need for planning permits for outdoor dining. This was a temporary reform brought in during the pandemic to enable restaurants and cafes to reopen safely. We found, however, that not only did it enable safe reopening for the hospitality industry but it also proved to be popular and commercially successful. As a result, in order to help the hospitality industry to grow and to thrive, and to provide the sort of service that customers are looking for, we have made that change permanent.

Other pro-business reforms pursued by this government include the replacement of stamp duty with the more efficient commercial and industrial property tax, the CIPT in short. The CIPT makes it easy to set up businesses or move locations and will provide a $50 billion boost to the economy while facilitating the creation of 12,600 jobs in Victoria over the next 40 years. We have also as a state committed to abolishing business insurance duty.

These various measures which I have outlined so far are saving businesses money. When businesses save money, they are better able to reinvest back into their business to help them grow, hire more staff and serve more customers. We are also using these reforms to make doing business easier and to ease the regulatory burden which businesses have faced for far too long. Whether it was the struggle of getting a liquor licence or needing a planning permit to have outdoor dining, these regulations made it harder for businesses to open, operate and grow. That is why removing these unnecessary regulations was important, and this is another way the Allan Labor government is committed to creating an environment which supports small business, to work to help them, rather than to get in their way. Reducing costs for small businesses does not just help businesses, however; it helps them pass on savings to customers and stave off price increases.

Those of us in this place who speak with small business owners in our constituencies know that these reforms are making a difference, but we do not just have anecdotes or personal experiences to show for it.

In the year leading up to January 2026 Victoria gained 14 points on the NAB business conditions index. This demonstrates that the changes which we have made have had a real impact in creating an environment which is friendlier towards businesses so that we can encourage and facilitate economic growth. Ultimately, the driving force behind these reforms and which have driven them through is this side of the chamber seeking to create a more prosperous state to benefit all people.

Small business has an important role to play in helping this state to achieve economic growth. Economic growth is how we create even more jobs and better wages. Of course small business is an important part of that big picture, but small business is not only part of the big picture; small business is often about the smaller picture as well. It can be the important role that one cafe or restaurant plays in the local community – the meeting place it creates for a community organisation, the job which it can create for a younger person entering the workforce, the wine it has sourced from the Victorian wineries and the food it has sourced from the Victorian farmers. The Allan Labor government has a commendable record on delivering for small businesses and creating an environment where small businesses, particularly in hospitality, can thrive and local communities can enjoy everything they have to offer. It is a record which all of us on this side of the chamber should be applauding.

 Richard WELCH (North-Eastern Metropolitan) (14:16): I thank Mrs McArthur for bringing the motion to the house. It is timely – probably more than timely. Anyone who talks to any business in Victoria knows it is obviously suffering, struggling, persisting and trying to buy time to get through to the end of the year. Every business I speak to in my community is feeling the pinch of the taxes, of the crime and of the cost of utilities and other inputs to their business. It is really dire, and it does reflect in the overall competitiveness of the state. We know that 92 per cent of employment in Victoria is actually from small businesses themselves. They are the backbone. We like to call lots of things the backbone, but this is literally the backbone of our economy. We have become a very unproductive state because of these things. We have lagged the nation by nearly a per cent for over a decade, and that is a compounding problem. We have a massive trade deficit as a state. We lose business to other states. Just today we lost another major – $800 million – investment into fuel systems. That has gone to, guess where, South Australia, where they actually have a concept of how businesses should be treated.

But I have risen to make a short contribution today because I want to read in some stats from the Australian Bureau of Statistics. Get your pens out, because I think this will be useful for future reference. One thing that is often quoted here in this chamber by the Treasurer and others is how many businesses have been created in Victoria: ‘They’re doing marvellously because’ – and I am quoting directly from the ABS here – ‘we had 123,400 new businesses in Victoria in the 2024–25 year. That sounds quite impressive, doesn’t it, until you just analyse the numbers slightly. We also had, though, 106,900 exits, so we had a net change of 16,500 businesses. But it gets better – or it gets worse – because when a business goes out of business and a new business enters, the question is not the number of them, it is how much capital departs and how much capital comes back in. You can have a proxy measurement of that capital by how many employees come along with that new business, because believe it or not, there is a difference between registering an Australian registered body number and being a business, and I will illustrate that.

In the year to June 2025 Victoria’s business stock changed as follows. Businesses employing 200 or more people were down by 28. Businesses employing 20 to 199 people were down 326 – so we had 326 less companies that employed between 20 and 199 people. Businesses employing five to 19 people – that is the group that might be in the payroll tax exemption zone; well, even then we had 395 less of them.

Businesses employing one to four people – that was down. There were 3627 less businesses, small businesses, the bread-and-butter businesses – well within that exemption range. Every single employing category went backwards – every single one. The only category that went forward, which makes that plus 16,000 that we have left after all the exits, is the one which employs no-one – zeros. Yes, we have 16,000 new businesses that employ no-one.

Bev McArthur: With an ABN and no employees.

Richard WELCH: And keep in mind the ABNs that are registered in Melbourne are because if you are a national company and you want to do business you have to register, but that does not mean you are actually operating in Victoria. It does not mean capital has come back into Victoria. It does not mean you are employing anyone. In fact the ABS says that actually the only category where we have increased business registrations is businesses that employ no-one at all, so that is where the 16,000 new businesses come from out of the 123,000 headline figure. There are no categories in which we are doing well in businesses that employ. There is no growth. There is no business growth, and that therefore manifests in the other really essential stat in the last two years: out of every 10 jobs generated in Victoria, eight of them were government related and only two came from the private sector.

The capital is not flowing back in a way that is generating jobs. We continue to lag in productivity. We continue, as Mrs McArthur pointed out, to be at the bottom of every metric, practically, of doing business in Victoria. It would only be those on the other side of this chamber who could somehow twist this around and posit that this is a positive thing for Victoria. But it does not surprise me because politically, they have got to. What else are they going to say? Of course they are going to have to defend it. But it follows this trend of ignoring object reality across all that they do. They say, ‘Everything’s fine in hospitals and everything’s fine on roads, and we’re investing here and we’re investing there.’ They will be very apt to point back to something that happened 35 years ago in this state but not deal with the reality that is before us right now, which is that we are a deeply uncompetitive state, deeply unattractive to significant investment, deeply poor on productivity, the worst in the nation for inflation and the worst in the nation for unemployment. In fact on any other metric you can go by – highest tax, highest barriers to entry – the numbers prove it. We do not employ people. Our capital stock, particularly in small business, is dropping, which is why the government going after the very small businesses that are struggling the most in a lawsuit is so disappointing. But then this government is never happier than when it is punching down on Victorians – punching down on regional Victoria, punching down on small businesses and punching down on people in activity centres who may not want towers next to them. Like any socialist government, it does not see people as people, it sees them as economic units to be pushed around on a chessboard and just marshalled where they see fit. Business is simply a bottomless pit of money you can plunder so that you can fund your debt, because that is the key equation we have got left.

That leads me to another point. One of the reasons why all this occurs is the confiscation of money from businesses to government in the way of land tax and payroll tax. It reaches a certain threshold where the ability of businesses to invest in their own business and grow is compromised, because if you do not have sufficient working capital, you cannot invest back into your own business. If you cannot invest back into your own business, you cannot grow, and if you cannot grow, you cannot employ people. It will manifest in two levels, either in your cashflow or in your working capital. It will be a hard constraint you will run up against.

The ABS figures say that that hard constraint means we drive employing businesses out of business altogether and we replace them with employeeless businesses instead. If the government’s objective is to create more small businesses, it is kind of succeeding, because they are all getting smaller – infinitely small, to the point of disappearing. I will leave my contribution there.

 Tom McINTOSH (Eastern Victoria) (14:25): I stand to oppose this motion and oppose much of the very interesting commentary we have heard from the other side. Of course the Liberal Party, as we all know, have no plan for Victoria, much like their colleagues federally have no plan for this nation. They are unable to identify what it is they believe in – a set of values that as a party they can gather around. Under Bolte the Liberals were state builders. They built dams, they built roads and they built power networks. What we see in the opposition today can build nothing. That is why motions like this come to the floor. They want government to play no role in improving the quality of Victorians’ lives, and they have no incentive, they have no drive, to improve the quality of people’s lives. That is why we have seen the Victorian Liberals have a different leader every year for the last half a dozen years, because they are absolutely focused on themselves and on tearing each other down and throwing mud within their own party and at the government and not bringing anything to the table that is solution focused, that is focused on improving the life of Victorians. They love the negativity. It is like they are willing Victoria down with their negativity.

But we know business investment is up over 50 per cent in the last 10 years. We know that there have been 123,000 new businesses since July 2020, an increase of 20 per cent. I will in my contribution go through more statistics, but I want to make the point that it does not matter what aspect of Victorian life you put in front of the Liberals; they will talk this state down. We just heard Mr Welch talk about punching down, which I think I and some of my colleagues actually audibly laughed at, to hear the Liberals try and accuse others of punching down when that is exactly the sort of politics that they in Victoria and around Australia have used. They find marginalised groups and they punch down, because, as I said earlier, they have no clear, identified values that they could create policies from which deliver a plan for voters. Instead the easy, cheap, lazy politics is to find people, generally those that are in a minority, to punch down on. That is exactly what the Liberals do, while we are in here talking about our economy and investments in this state and economic outcomes for everyone in this state. It is that laziness that has led to consistent years of Liberal leadership turmoil and a lack of clearly identified plans from them as a party.

Mr Welch talked about confiscation of money by the government. You hear this sort of extremist language from the other side, and last year there were debates that gained media attention, from the Liberals using language that most moderate Victorians find just disgusting. But do you know what government needs to do? They need to invest in what makes our state better, what makes our state more productive and what improves the quality of life of all Victorians. When we are talking about employers and businesses, they benefit when we invest in early education – when our kids get the best start in life through being out socialising and through learning as early as possible, firing all those pathways for the time they are coming into school-age education. I have spoken to primary school teachers that say they can see the difference. They can see the difference that it makes, from that three- and four-year-old education pathway, when they are hitting foundation/prep, those early years.

With that difference you are then ahead every year all the way into working life. I had a bunch of year 12s in here just last week who were sitting in this very chamber, who were out doing two days a week in TAFE, three days a week in school, keeping them in the education system to complete year 12 whilst training and engaging in the workforce but entering the workforce fit and ready for work at an age when they have got the maturity and the skills and have developed holistically to be a really productive part of the workforce. So it is about supporting our youngest Victorians to develop and, when they enter the workforce, to be personally happy and productive on a personal note but also productive in their workplace and for our broader economy.

The investments this government has made in public transport to get people from home to work and the investments we are making in housing – nation-leading rates of housing – are seeing downward pressure on rental prices and downward pressure on housing prices. Yet those opposite want to get rid of the short-stay levy. As usual, they just want to say ‘Let’s rip. We don’t care about whether people can get housing. We don’t care about investing in social housing.’ It is just another example of the Liberals’ view that they learned when they were at university, in their uni clubs, their Young Liberal clubs, looking at Reagan, looking at Thatcher, idealising Reaganomics and free marketism – it is quite astounding.

Alongside the investment in public transport, we are investing in our roads network to ensure that not only our workers but our products can get from A to B.

Bev McArthur interjected.

Tom McINTOSH: Mrs McArthur, this is the thing. They will never acknowledge the investment that we are making in our freight networks or the trains under Kennett that they ripped out and the stations they shut down. The movement of grain in this state – they ripped it apart and they decimated it. It is like the TAFE system. We heard Ms Tierney in her ministers statement today talking about TAFEs. I think it was 22 TAFEs that the Liberals closed. You know what, if you are a business, you want to be able to find a worker who is equipped and well trained to be as productive as possible in your workplace. You guys gutted TAFEs, exactly like you gutted our transport networks through our trains, linking our agricultural product to our ports and to interstate transport networks. Time after time there is example and example again of where the Liberals just cut and cut and cut to remove the services that our businesses need, that our economy needs, for us to be the most productive society ever.

And you talk down this state. Ms Bath was in here talking yesterday about the town of Nyora. It is a very small town. She could not bring herself to mention the new lights at the footy club, because it is not in your DNA to acknowledge the positive and it is not in your DNA to celebrate. It is in your DNA to talk down every single aspect and every single component of Victoria. As I outlined, when you have got no clear set of values between you, when you cannot create policies that will improve people’s lives in Victoria, you do not come to Victorians with a plan, you go to the negative, and you go after people. You go after groups of people when you think it is advantageous. But Victorians have seen through it, and they continue to see through it.

Bev McArthur interjected.

Ingrid Stitt: On a point of order, Acting President, I would ask you to bring Mrs McArthur to order, because I believe that we sat in silence on this side of the chamber when listening to contributions of those opposite.

The ACTING PRESIDENT (Jeff Bourman): Mr McIntosh has got a cracking 41 seconds to go. If we can hold it until then, that would be great.

Tom McINTOSH: As I said in my first speech, I believe Victoria is the greatest state on earth. I was fortunate that when I did my trade I got to travel much of the world and see many, many countries around the world. In Victoria we have incredible resources, we have incredible people and we have incredible diversity. We are a powerhouse of the Southern Hemisphere, we are a powerhouse of the world, and every single day we should celebrate it. We should celebrate every single day the economic activity in this state. I, for one, love Victoria. I will leave my contribution there.

 Renee HEATH (Eastern Victoria) (14:36): First, I might just start by addressing some of the things that Mr McIntosh just said. He often talks about how the Liberal Party is just negative, and one of the things he said is ‘It’s not in your DNA to celebrate.’ That was one thing he said. He also said, ‘You’re always talking about the negative.’ I want to talk about why we do bring these things up, because when every child is born in Victoria, they inherit essentially their own little patch of debt – $20,000 of it. Because of Labor’s corruption, every home, every household, is going to have essentially a $5000 corruption debt that they will have to pay. So while you are over there celebrating yourself – and good on you, because really self-praise is better than no praise – the reality is that things are a mess in this state. Mr McIntosh also spoke about education, where the reality is that one in three children in the state of Victoria cannot read and write proficiently. When you go into areas like those that Mr McIntosh and I both represent, that number comes down to one in two. We are not being negative by highlighting that; we are fighting for the next generation so they can actually have a go and get ahead. Let me tell you, Mr McIntosh, the biggest indicator as to whether a child will enter a life of crime is whether or not they can read and write. So you can talk and you can celebrate yourself – that is really lovely – but the reality is that people are hurting in this state.

I want to thank Mrs McArthur for bringing in this important motion. More importantly, I want to thank her for bringing up the plight of my constituents in Bald Hill Road, who are really, really suffering. I was not going to speak on this motion until Ms Ermacora came up and started calling it cherrypicking nonsense. That is what she called it. Then she went on with the most patronising and self-serving speech. She actually said ‘Let me teach you something’ and started speaking about small business. That is when I decided that I was going to stand up. I tell you what, you can grandstand, you can patronise us and you can say that we know nothing – what we are representing here is the 350 small businesses that shut every single day in Victoria. They are places like Pakenham Bulk Foods, who have had an 80 per cent drop in their revenue and are now concerned. Their kids have already come out of the sports that they were playing because they cannot afford it. Their business is about to go bust and their dreams are crushed. That is not cherrypicking nonsense; that is what we are here fighting for. I think the speeches that you have given today have just shown a complete disconnect and a lack of compassion. I want to thank Mrs McArthur for bringing this motion to the house, and I commend it.

 Bev McARTHUR (Western Victoria) (14:39): With great pleasure I will sum up. I first of all want to thank my colleagues Mr Luu, Mrs Deeming, Richard Welch and Dr Heath for absolutely identifying what is wrong in Victoria in relation to small business. What is wrong is you people over there on the other side. You hate small businesses. You are busy going to the courts, spending 40 million of taxpayer dollars to fight small businesses, the mum-and-dad businesses of Victoria. And you are handing over nearly $3 million to a Californian consultant to fight small business. What an absolute disgrace you are, you people over there.

I love Victoria. Even more so, I love Western Victoria region, and guess what? I live there. Unlike Mr McIntosh and Mr Berger, who do not live in their electorates, I actually live in my electorate, as does Dr Heath and as does Mr McCracken. They live in their electorates, as does Mr Mulholland as well.

Members interjecting.

Bev McARTHUR: You do not live anywhere near your electorate, Mr McIntosh. Anyway, with a bit of luck you will not be there after you do your preselections.

But the fact is that you will not stand up for small business; you would rather go to court and spend $40 million fighting 16,000 small businesses, and you will hand over money to a Californian consultant who says they ought to have had insurance for pandemics. This is in the state with the greatest lockdown in the world. You locked people up; you actually sent businesses broke left, right and centre. They are not recovering, and now they are taxed to the hilt. There is crime rampant. They get broken into all the time; there is theft at extraordinary levels. Everything is a problem for small business. You do not care at all, and you totally deny the facts that we have identified. As Mr Welch said, of the 16,000 new small businesses that you wanted to talk about, they do not employ anybody. They do not employ one person. And out of every 10 new jobs, eight are in the public sector. That is not about small business.

You have absolutely no idea what it is like to be in small businesses. As I said, so many of them cannot pay the rent. They cannot employ anybody. They cannot even take home $100 at the end of a week, because they are in such dire straits. If they do not get broken into, they get taxed and they get regulated. Being under this government for small business is just the worst place to be in Australia. We think that small businesses are the backbone of this state and of this country, and we will stand up for them every day, even if you will not. You absolutely do not care about small business. Nothing that you do actually helps small business. The regional business alliance is absolutely strapped trying to mentor small businesses that are going broke. You give them no assistance whatsoever. The chambers of commerce are all volunteers trying to do their best for small business. You give them no help whatsoever. And what do you do with 65 new and increased taxes? You just make life for small business, life for families and life for individuals in this state terrible.

Tom McIntosh interjected.

Bev McARTHUR: What about how every tax you have introduced has affected small business, because small businesses are usually families – families who are struggling with a cost-of-living crisis brought about by high energy costs, taxes, regulations, charges and crime in this state which is rampant. This is the crime capital of Australia. You had $14 million on machete bins, and they are still out there waving them around on roadsides. You have done nothing to stop the crime in this state. It gets worse every day. People commit crimes, especially young people. Nothing happens to them. Meanwhile businesses have to close their doors. You do not care about small business. We do. And we will stand up for them every day of this week and every day of this year.

Council divided on motion: