Manufacturers fight tax rise

Richard Weinzierl (front) with apprentices Harrison Don, Tom Stevens and Joshua Parkinson 391403_04

By Emma Xerri

The South East Melbourne Manufacturers Alliance (SEMMA) is campaigning against significant land tax increases being felt by their members state-wide.

Calling the increase an “unjustified tax grab”, SEMMA believes manufactures should be exempt from this tax increase, and are urging for transparency from the State Government regarding the substantial increases in land values and consequent land tax burdens on local manufacturers.

SEMMA CEO Honi Walker believed the burden had been placed on the state’s manufacturers to “absorb Victoria’s debt burden”.

“Manufacturers are being penalised for running profitable businesses – businesses that are the engine room of our state’s economy,” she said.

“We kept the state’s economy ticking over during Covid as manufacturing was designated an essential service.

“We continued to pay ever-increasing taxes – (land, payroll, FBT, PAYG, Capital Gains Tax, GST and Company Income Tax) plus an increase in WorkCover premiums, in some cases over 70 per cent – you name it, we paid it.

“And we did not receive any government hand-outs to keep our doors open.

“Now we are being asked to cover a debt that we did not contribute to.”

In a survey to SEMMA members, 100 per cent of respondents said they were facing extreme increases in land tax from last year.

Managing director of Berwick’s own Australian Precision Technologies Pty Ltd, Richard Weinzierl, said their land tax had more than tripled since last year.

“In the current climate it is hard enough to run a medium-sized business and keep the running costs down when you are served with an unexpected increase, particularly when we have budgeted according to the previous year,” he said.

“Our business is making an enormous effort to create local employment in the area, and we also run apprenticeships.

“If these increases persist, it will have a very big impact on business going forward. We would even have to seriously consider not continuing with apprenticeships or the like.”

Hallam manufacturer Ace Wire Works’ land valuation also doubled from $4.2 million to $8.5 million in 12 months, resulting in a land tax bill climbing from $58,575 to $177,400.

Project manager Simon Blashki said their land tax bill had soared 1000 per cent in five years, stressing that increased land value “doesn’t make our business more profitable”.

A fairer revenue-raiser would be tied to a company’s profit, Mr Blashki said.

“It’s a huge amount of money to pay. Trying to compete overseas and interstate – that’s where this gets more challenging.”

With these increases being felt across SEMMA’s entire membership base, Ms Walker highlighted that “the effects will be felt at the consumer level when we are forced to increase our prices to cover these tax hikes”.

Long-serving SEMMA member and president, and Dandenong manufacturer, Peter Anglico also spoke to the severity of the issue, saying this campaign is “probably the strongest action we’ve taken”.

South-Eastern Metropolitan MP David Limbrick of the Libertarian Party regarded the issue as a “dreadful assault on the most valuable people we have, the people who use their ingenuity to create wealth”.

He told Parliament that “thousands” of manufacturing jobs were under threat due to “yet another over-the-top government response to the pandemic”.

Opposition treasury spokesperson Brad Rowswell also said the “excessive” land tax rises were “crushing Victorian families and businesses”.

“The government has run out of money and we’re all paying the price.

“Victorians deserve immediate tax relief which would take some of the pressure off families and provide businesses with the breathing room to scale up operations and help grow our economy.”

A State Government spokesperson said it was engaging with SEMMA to discuss its concerns and how to support manufacturing in South East Melbourne.

“We’re continuing to invest in Victoria’s manufacturing industry to help local businesses innovate and expand as they are key to growing our economy and supporting local jobs.”

The spokesperson said the changes to land tax rates and thresholds were “temporary”.

“Land tax assessments also move with land values.

“Victoria’s land tax scale remains progressive and ensures that smaller property investors pay proportionally less than those with larger landholdings.”