The Victorian Government has introduced several measures to pay off the COVID-19 debt. In 2024, a new land tax was implemented to increase state revenue. This tax will affect over 800,000 Victorians and was introduced in May 2023 to help alleviate the substantial debt accrued due to the pandemic.
Under the 10-year “COVID-19 Debt Levy,” Victorians who own a holiday home or investment property between $50,000 and $100,000 must pay an additional $500 in annual land tax. Properties worth up to $300,000 are subject to $975 in annual land tax, with an additional 0.1 percent added for every dollar above that. Previously, properties valued under $300,000 were exempt from land taxes. Modelling from the Victorian State Budget Office estimates the land tax will generate $1 billion in additional revenue compared to initial projections.
Alice Stolz, Managing Editor of Domain, believes that the new levy will significantly impact property owners. She stated that many families will face financial strain due to the additional tax and emphasized that people are also paying mortgages on these properties.
In addition to property tax hikes, the Victorian Government intends to pay off the COVID-19 debt through several methods. This includes requiring businesses with annual payrolls exceeding $10,000,000 to pay an additional payroll tax. The state will also increase the Workcover Premium for employers. Revenue-raising measures will also come from speed detection cameras, public transport fare hikes, and increased road usage fees.
Victorian Health Minister Mary-Anne Thomas has defended the levies, claiming that they are necessary to fulfill the state’s commitment to paying down the COVID-19 debt. However, Victorian Opposition Leader John Pesutto criticized the tax measures, characterizing them as a desperate attempt to address budget shortfalls caused by government mismanagement.
The data from the Australian government indicates a substantial increase in government debt due to COVID-19 policies, reaching its highest level as a percentage of GDP since World War 2. Victoria specifically incurred significant debt to implement extensive COVID-19 mandates, spending approximately $40.1 billion to prop up the economy through stimulus packages for individuals and businesses.