Victorian Premier Daniel Andrews will step down from the role on Wednesday, calling time on a nearly decade-long tenure that coincided with one of the most turbulent economic crises of the past century.
After the state Labor Party secured election victory in 2014, the Andrews government embarked on reforms to small business payroll tax thresholds, and the controversial addition of two public holidays to the calendar, imposing extra costs on traders hoping to keep their doors open for the day.
Those decisions were overshadowed by Andrews’ handling of the COVID-19 pandemic, which saw Victorian businesses and households subjected to six lockdowns and 262 days of harsh restrictions.
Billions of dollars in state government handouts to the business community helped to keep struggling traders afloat.
Yet the stop-start nature of the state’s lockdowns rattled small businesses across the map, with many businesses that shut during the strongest pandemic restrictions unlikely to ever reopen.
As lockdowns fade into memory, businesses are now subject to a COVID-19 debt levy, designed to recoup some of the funding expended by the Andrews government as it attempted to keep the economy alive.
Here is a look at Andrews’ tenure, as told by select SmartCompany headlines.
Andrews came to power in the 2014 state election having grown up in a family well-versed in small business. Six years later, decisions made by his government would dictate the fate of small businesses struggling through pandemic conditions across the state.
[Tim] Pallas’s boss and Victorian Premier Daniel Andrews also grew up in a small business household.
Andrews’ father Bob was the owner of a mixed business store in Glenroy in Melbourne’s northern suburbs, but after the store was rebuilt after having been badly damaged by a fire in a neighbouring business, Bob Andrews reportedly sold it at a loss.
The Andrews family moved to Wangaratta in the state’s north east where Bob Andrews drove a truck delivering Don Smallgoods and later became a beef farmer.
While the headlines focused on big-ticket decisions around the East-West link project and the Metro Tunnel project, the Andrews government’s early budgets honed in on payroll tax tweaks affecting small employers.
Victorian small businesses have applauded changes to payroll tax in Premier Daniel Andrews’ first budget, saying it will help them compete against interstate companies and employ more people without increasing their overall tax burden.
The 2016-17 Victorian budget, handed down yesterday, revealed the state government is tweaking payroll tax for the first time since 2002.
The payroll tax threshold will be lifted from $550,000 to $650,000 over a four-year period.
The state government’s 2015 decision to establish both Easter Sunday and the Friday before the AFL Grand Final as public holidays caused a stir with employers, and continues to raise the ire of small business owners.
Next week’s AFL Grand Final eve public holiday in Victoria is a worry for many small businesses, but there are some operators capitalising on the long weekend – with dance parties.
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One critic of the Victorian holiday is Council of Small Business Australia chief executive Peter Strong, who says that the Victorian government’s decision to persist with the additional public holiday is “stupid” as there are still more business owners who have to pay for it than those who make a profit.
Further payroll tax tweaks rolled through in the 2018-2019 budget.
Metropolitan small businesses will be given a reprieve, with the payroll tax-free threshold lifted to $650,000 from July 1, 2018. This is expected to benefit around 38,000 Victorian businesses.
Regional small businesses will get another payroll tax cut, from 3.65% to 2.45%. This builds on a reduction in the payroll tax rate for regional businesses in last year’s budget, and is expected to help 4000 business in regional areas.
Same too in the next year’s budget papers.
Delivering the 2019-20 Victorian budget on Monday morning, the Labor state government pledged to increase the payroll tax-free threshold from $650,000 to $700,000 by 2022-23.
The plan will cost $86.7 million and is slated to save 1,400 businesses from paying any payroll tax — about 0.24% of all small businesses in the state.
The $50,000 increase — split over two years — has copped some criticism though, with Victorian Chamber of Commerce and Industry chief Mark Stone worried about the effects on small business if the threshold is not brought into line with other states.
The defining issue of Andrews’ leadership was his government’s handling of the COVID-19 pandemic. Panic and uncertainty mounted after Australia confirmed its first cases of the virus in January 2020. Before announcing some of the strictest and longest-lasting lockdown conditions in the world, the Andrews government rolled out support to affected businesses valued at $1.7 billion.
The Victorian government will begin refunding payroll tax payments to small and medium businesses across the state this week as part of its $1.7 billion economic stimulus package in response to the COVID-19 pandemic.
Victorian Premier Daniel Andrews and Treasurer Tim Pallas outlined the measures on Saturday in what they said is a stimulus package targeted directly at SMEs and the workers they employ.
The government has pledged to fully refund the payroll tax already paid by small and medium businesses in the 2019-2020 financial year, in a measure estimated to be worth $550 million.
Adem Somyurek briefly stood as Minister for Small Business in 2015 after his chief of staff levelled bullying allegations against him. Somyurek returned to the post after Labor’s 2018 election win but was later sacked in the aftermath of a branch-stacking scandal.
Andrews later pledged to adopt 21 recommendations handed down by the Independent Broad-based Anti-corruption Commission and Victorian Ombudsman in relation to the branch stacking revelations.
“There’s no findings or commentary about me in this report, but I take full responsibility for the conduct of those in my team,” Andrews told reporters in 2022.
The Age and 60 Minutes published photographic evidence on Sunday that Somyurek withdrew several thousand dollars in cash for the payment of fake Labor Party memberships, part of what was described as an “industrial-scale stackathon” to crush his political rivals.
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“There is no place in my team for him [Somyurek]. That is what I informed him [Somyurek] this morning,” Andrews said during a press conference about the revelations.
Andrews rejected any suggestion he has been personally involved in branch stacking on Monday, saying he follows the party’s rules.
“I’ve acted appropriately at all times,” Andrews said.
Melbourne endured stop-start lockdowns for much of 2020 and 2021, as the Andrews government attempted to slow the rate of COVID-19 infections among an unvaccinated community.
The lockdowns were costly, emotionally and materially, with those efforts expended by the community in order to save thousands of lives.
The mounting levels of state and federal support for businesses and workers were not enough to keep every shuttered business in operation through multiple lockdown periods.
This Friday, Melbourne’s Lucky Penny Cafe was supposed to host its first live music event in months, with 50 people expected to turn up for dinner and a show to celebrate Victoria easing its business-crushing COVID-19 trading restrictions.
But the party’s over before it started. On Saturday, Victorian Premier Daniel Andrews cancelled a planned lifting of patron restrictions on cafes and restaurants across the state after a spike in coronavirus cases.
Now Lucky Penny owner Matt “Lanis” Lanigan will spend the start of the week cancelling bookings and issuing refunds rather than planning for the biggest trading night since the pandemic began.
“It’s very deflating, I’d like to say I’m a positive person but I’d be lying if I said it wasn’t hard to swallow,” Lanigan tells SmartCompany.
Small businesses located within the 36 Melbourne suburbs that will soon re-enter Stage 3 coronavirus restrictions will be eligible for one-off grants of $5000 from the state government, with applications due to open in coming days.
On Tuesday, Victorian Premier Daniel Andrews announced the return of ‘stay at home’ restrictions for suburbs across Melbourne’s north and west, following sustained increases in the number of new COVID-19 cases in the capital city.
Maria Iatrou was closing up her Ascot Vale cafe Espresso 155 on Tuesday when a frazzled customer showed up with some bombshell news.
The Melbourne suburb Iatrou’s two-building cafe is located in, at the once-bustling Union Road precinct, was about to go back into lockdown.
“I was sitting there asking when? I thought there was no way, we’d been through so much,” Iatrou tells SmartCompany.
Victorian Premier Daniel Andrews was, at the same time, announcing a reimposition of trading restrictions across 36 Victorian suburbs, amid a second wave of coronavirus infections.
As Victorians ground through September 2020 lockdowns, the Andrews government announced a major new support package including cash grants, tax relief and cashflow support.
The Victorian government has announced a $3 billion support program for businesses affected by the state’s extended COVID-19 lockdown, in a major push to position the economy to reopen in the coming months.
Unveiled by Premier Daniel Andrews on Sunday, the latest round of state government stimulus doubles the dollar value of funding provided to businesses over the course of the pandemic, now standing at $6 billion.
Uncertainty over when Victoria would formally reopen rattled the business community. Mark McKenzie, former chairman of the Council of Small Business Organisations Australia, was one of many business advocates to say entrepreneurs needed clear guidance about when conditions would return to normal.
Businesses need a hard reopening date, as opposed to waiting until COVID-19 case numbers reach a theoretical daily infection rate threshold that has been developed by computer models that do not take into account the associated adverse economic and human impacts.
Most importantly, failure to implement a staged reopening of the Victorian economy from this Sunday will result in many small and family businesses in Victoria being forced to close their doors permanently — even before the Christmas trading season begins.
Retail and hospitality businesses all over Melbourne will close permanently if they cannot trade in November and December.
That guidance came a fortnight later.
Hospitality and retail businesses in Melbourne will be able to reopen from Wednesday, as Victoria records zero new COVID-19 cases for the first time since early-June.
“Now is the time to open up,” Andrews said in his afternoon press conference today.
As of 11.59pm on Tuesday, 27 October, 2020, metropolitan Melbourne is finally moving to the next step of reopening.
Yet the virus was hardly eradicated. A burgeoning vaccine program was yet to reach the majority of Australians, and resurgent case numbers put the state back on high alert. The Andrews government deemed further lockdowns were necessary, with exceptions for essential services and some takeaway options.
Businesses in Victoria will enter their fourth coronavirus lockdown from midnight tonight, as a cluster in Melbourne’s outer northern suburbs grows to 26 cases.
The Victorian government announced a seven-day circuit breaker lockdown from 11:59 pm Thursday, May 27, to 11:59pm Thursday, June 5, at a press conference this morning.
Essential shops like supermarkets, food stores, bottle shops, banks, petrol stations and pharmacies will remain open. However, cafes and restaurants will only be able to offer take away.
One of the most high-profile demonstrations against the state government’s handling of the COVID-19 pandemic occurred in September when construction workers protested against vaccine requirements.
A two-week shutdown of the construction industry was necessary to address vaccine compliance, Health Minister Martin Foley said, while estimating the cost to the economy would be some $6 billion.
Workers protested the announcement, culminating in a march across the West Gate Bridge.
The latest two-week shutdown of the construction industry in parts of Victoria is causing “chaos” and frustration for small business owners, who are being caught up in the vaccination debate.
Last night, seemingly in response to protests against vaccination requirements for construction workers, the Victorian government announced all construction projects in metropolitan Melbourne, the City of Ballarat, the City of Greater Geelong, Surf Coast Shire and Mitchell Shire would halt.
The shutdown applies from midnight, September 20, for two weeks, with the exception that workers can respond to an emergency, or perform essential or urgent work.
Sentiment towards the Andrews government was captured in an opinion piece by former Crikey reporter Kishor Napier-Raman.
Many of the Andrews government’s tough public health measures have been very effective. But the sledgehammer approach results in too many blunt, reactive decisions that do little more than make people’s already crummy lives a little more miserable. And it means that even if the construction ban was justified, the government had burnt through so much public goodwill on nonsense like curfews that some people are no longer willing to give it benefit of the doubt.
Still, most Victorians agree with the sledgehammer and remain willing to sacrifice freedoms a little longer. But that shouldn’t mean we ignore the very real anger that is simmering. Next time it might not just be the crazies out in force.
Even as lockdowns eased, businesses struggled through a transitional period where harsh lockdowns were replaced by density limits, vaccine checks, and compliance measures for customers.
The timing and the stop-start nature of the vaccine checking requirement, following freedoms experienced by unvaccinated Victorians, has been extremely challenging for retailers to manage.
Customer aggression has remained a problem throughout the pandemic. However, the behaviour exhibited by customers during the past week reached peak levels, resulting in many retail staff becoming fearful to return to work. As you can appreciate, not only does this pose serious mental health risks, it also makes it extremely difficult for retailers to operate during the busiest shopping season of the year.
The current skills crisis has already seen many retail and hospitality outlets close due to lack of available staff. This, coupled with the enormous pressure retailers are already under due to supply chain issues and the intensity of Christmas and Black Friday trade, it is creating unprecedented levels of anxiety.
Victorian Treasurer Tim Pallas may have mentioned ‘business’ only five times in his budget speech as he delivered an election-year budget focused on health and education today, but there is a raft of new funding measures for small businesses included in the budget papers.
Among the initiatives for small business is a $10 million Business Acceleration Fund, which the government says will “cut red-tape and streamline regulations” to help businesses and their owners save time.
Small Business Minister Jaala Pulford said the fund will “streamline applications and approvals, improve information flow and provide faster licensing at local and state levels, helping new and growing small businesses”.
To entice diners back into restaurants during the transitional period, the Andrews government offered a voucher scheme in March 2022, and topped it up in September.
Diners and tourists across Victoria can now claim 25% cash back every time they eat out or visit one of the state’s leading entertainment attractions, thanks to a new $25 million instalment of the state government’s Dining and Entertainment Program.
The Andrews government reintroduced the scheme on Monday, offering restaurant patrons and visitors the ability to claim money back each time they spend $40 or more at a participating venue.
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The scheme follows on from the initial $60 million Victorian Dining and Entertainment Program offering, which came into play in March this year.
The scale of Victoria’s pandemic-era spending was laid out in the 2023-2024 state budget, which projected net debt would rise to $171.4 billion by 2026-27.
With that backdrop, the Andrews government again tweaked payroll tax measures.
The Andrews Labor government says it plans to make payroll tax “fairer” for Victorian small businesses by lifting the payroll tax-free threshold in two stages over the next two years.
Labelling the current payroll tax-free threshold of $700,000 as “too low”, the state government said it will increase the threshold to $900,000 from July 1, 2024, and again to $1 million from July 1, 2025.
This means Victorian employers with total payrolls below these amounts will not need to pay payroll tax in Victoria. The state’s current payroll tax rate is 4.85%, except for regional employers, who pay a payroll tax rate of 1.2125%
It also announced a temporary COVID-19 debt levy covering businesses with greater than $10 million a year.
Some advocates argue that levy still has the potential to squeeze small businesses.
In order to repair the gaping hole in the state’s budget, Victorian businesses with national payrolls above $10 million a year will be subject to an additional 0.5% levy on top of the existing payroll tax rate, with a further 0.5% for businesses with a payroll over $100 million.
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A Victorian business with a national wage bill of $10 million can still be a relatively small operation in this state, but remains firmly in the Treasurer’s sights.
The Andrews government sensationally scrapped plans to host the 2026 Commonwealth Games across regional Victoria after claiming their projected cost had blown out from $2.6 billion to as much as $7 billion.
The about-face came as a surprise to small business representatives in the regions the Games were scheduled, and local sportstech startups hoping to translate the event into international publicity.
Small businesses in regional Victoria were attuned to potential the tourism, hospitality, and construction benefits associated with the event and its necessary upgrades.
Despite the fate of the 2026 event now being put in limbo, the state government has confirmed those regions will still face a $2 billion government funding package, split between funding for new and existing venues, and social and affordable housing.
By mid-2023, business fears over the COVID-19 public health crisis had well and truly morphed into economic concerns: surging inflation and an aftershock of COVID-19 shortages continued to flow through the economy. At the same time, interest rate hikes designed to curb excess consumer spending pushed entrepreneurs to the edge.
The Andrews government alone was hardly responsible for all of those hardships, but a hike to WorkCover premiums, designed to help fund what the state government called a “fundamentally broken” scheme, added new pressure to business.
Victorian small and medium businesses are now considering budget adjustments and passing on the cost of labour, as they add surging WorkCover insurance premiums to the list of growing operational expenses.
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The Victorian government said it was necessary to raise those premiums to cope with the rising cost of payouts, as the system’s claims liability has tripled since 2010.
WorkCover is “fundamentally broken” in its current guise, the state government said in May.
The gap between benefits paid and premiums received each year stands at $1.1 billion and is only growing, the state government added.
Now, Victorian businesses are contemplating how to handle the cost of rising insurance premiums, while also handling external financial pressures.
Towards the end of Andrews’ tenure in the top job, the decision to hold a Grand Final eve public holiday continued to draw concern.
Eight years since Victoria introduced the AFL Grand Final eve public holiday, small businesses across the state are still unsure of its merits, claiming interrupted trade and an extra day of penalty rates will harm enterprises doing it tough.
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
