Energy And Business Policies Put Victoria At The Bottom Of The Ladder

Written by:
21 February 2024
Energy And Business Policies Put Victoria At The Bottom Of The Ladder - Featured image

“Victoria is the biggest loser as the only state in the nation to experience a decline in new business startups over the past three years, no doubt set to get worse due the catastrophic failure of the state government’s energy policies,” said Lachlan Clark, Research Fellow at the Institute of Public Affairs. 

New analysis by the Institute of Public Affairs of the Australian Bureau of Statistics’ Counts of Australia Businesses data shows Victoria is the only state where new business starts have declined from 2021 levels;

  • New South Wales (+13,342)
  • Queensland (+7,610) 
  • Western Australia (+4,466)
  • South Australia (+3,421)
  • Tasmania (+671)
  • Australian Capital Territory (+604)
  • Northern Territory (+297)
  • Victoria (-13,326)

“The latest ABS data confirms Victoria is closed for business. You can hardly blame would-be business operators thinking twice about starting a business in Victoria given the monumental economic mismanagement of the Victorian state government,” said Mr Clark.

The ABS data also shows in 2023 there were 22,796 more business exits in Victoria when compared to 2021, which was greater than any other state or territory.

“Today, Victoria has the unenviable record as the only state to have business starts going backwards but is also home to the fastest growth in business closures,’’ said Mr Clark.

This record is set to only get worse as businesses across Victoria brace for further system-wide blackouts on the back of the state government’s failed energy policies, which include a constitutional ban on gas exploration and an unachievable 95% renewables target by 2035. Recently, Victorian Chamber of Commerce and Industry Chief Executive Paul Guerra declared;

“If we start to question the availability of energy in a reliable and affordable sense, that will be the nail in the coffin for some businesses. They’ll make the decision to move out of Victoria, and we’ll be poorer for it.”

“This is a dark time to be a business in Victoria. With inflation and interest rates eating into profits, Victoria has the highest level of taxation as a share of the economy and energy bills continue to rise past record levels making it harder to get ahead,” said Mr Clark.

Previous IPA research on the growth of red tape and regulation across all states and territories found that regulation in Victoria has grown faster than anywhere else in the country.

“Victoria is quickly turning back into the rust-bucket state. When businesses close and entrepreneurs refuse to take a chance in a state riddled by high taxes and red tape, and where you cannot rely on the lights staying on, Victorians miss out on employment and opportunities,” said Mr Clark.

Read the IPA’s previous research on the growth of regulation click here.

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