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Victorians Lift Daniel Andrews Covid Tax As Real Losers Revealed


Outrage is mounting after the shock announcement that Victorians will be hit with a decade of Covid tax pain to ease the massive national debt.

Prime Minister Daniel Andrews’ latest budget, released on Tuesday, revealed that businesses and real estate investors would be saddled with $8.6 billion in “temporary” levies in a bid to contain Victoria’s skyrocketing debt levels.

The Covid-19 debt levy will raise $3.9 billion over the next four years from companies with payrolls in excess of $10 million and $4.7 billion from real estate investors.

The levy will apply for the next 10 years and will raise more than $20 billion in total.

About 860,000 Victorian landowners will be affected, along with nearly 4,000 businesses.

Those who own more than one home will pay at least $5,000 over the next 10 years, with a new annual tax of $500 for investment properties with land values ​​between $50,000 and $100,000.

The payment is increased to $975 for homes valued between $100,000 and $300,000, while an additional 0.1 percent of land value is applied to properties valued more than $300,000.

Meanwhile, companies with a national payroll of more than $10 million will also be forced to pay an additional 0.5 percent payroll tax, or 1 percent if their national payroll exceeds $100 million, affecting about 5 percent of the companies in the state.

However, attention is now turning to the real losers of the new tax, with experts claiming the increase will likely be passed on to renters already struggling with skyrocketing rents amid the country’s housing crisis.

Emma King, CEO of the Victorian Council of Social Service (VCOSS), is among those concerned that the tax increase could lead to higher rents.

“As for any tax increase for landlords, it should not be passed on to tenants under any circumstances, and to be honest when that happens people should be screaming it loud and loud because we want to know, and pretty much we should name and shame , ‘she said.

3AW radio host Tom Elliott said Mr Andrews’ attempt to blame the Reserve Bank and the pandemic on the state’s debt burden was “utter nonsense” and said Victorians will be forced to pay for the “mistakes” that the state government has made in managing Covid.

He also denounced a “lie” being sold about the impact the levy would have on the rental market.

“The government has said this will not affect rents – of course it will,” he said.

“If you’re a landlord renting out your property and the government is going to give you a beating right now, say two or three grand extra a year, you know, Covid debt property tax surcharge, then of course you’re going to try to recover it from your tenants.

“Big companies like Coles and Woolies will pay the extra payroll tax to help bail out the state government — they’ll try to pass the cost of that tax on to customers, which is all of us.”

Mr Elliott insisted the measures would eventually lead to “tenants paying more rent”.

“So if the state government says this won’t affect the average hard-working Australian or Victorian family, that’s wrong, it’s a lie, it’s an untruth,” he said.

“We already have a rental crisis, this will only make it worse.

“Large companies with market power, like Coles and Woolworths, who are saddled with an extra payroll tax, will pass that on to customers, so it hurts everyone.”

Under Victorian law, in most cases rent cannot be increased more than once every 12 months. The only way to challenge an outrageous rent increase is to ask Consumer Affairs Victoria to investigate the increase.

The Property Council of Australia’s Victorian executive director Cath Evans also lashed out at the land tax, claiming it could lead to investors fleeing the state – and rent increases for tenants.

“Lowering the tax threshold will naturally put more stress and pressure on those landowners to keep those properties,” she said, according to the ABC.

“And it becomes a risk that those costs will be passed on to tenants, which of course adds to what is already a major challenge in our rental market here.”

Tuesday’s tax announcement came just hours after PropTrack’s latest Market Insight Report revealed that the share of total properties listed for rent on for less than $400 a week fell to just 16.2 nationally. percent in April 2023, the lowest on record, with the share of total rental housing under $400 per week halving in most capital cities, including Melbourne.

Although Shadow Treasurer Brad Roswell dismissed the levy as a “tax on tenants” who can “least afford it,” Pallas told ABC Radio he didn’t believe the tax would play “a substantial role” in raising rents.

Joanna Swanson

Joanna Swanson is Europe correspondent at the Thomson Reuters Foundation based in Brussels covering politics, culture, business, climate change, society, economies and inclusive tech. With specific focus in breaking news, she has covered some of the world's most significant stories.