Victoria ranked Australia’s worst state to do business
Victoria has been named the worst place to do business in the country in a new report from the Business Council of Australia.
“Victoria is the worst place to do business in Australia and continues to face serious challenges, with the highest unemployment rate in the nation, high taxes and unnecessary regulation making it harder for business to invest, grow and create jobs,” BCA chief executive Bran Black says.
“The same problems we identified last year still exist, particularly around payroll tax, property taxes and business licensing.”
The BCA’s Regulation Rumble 2026, released on Wednesday, ranks states based on the performance of their regulation, taxation and planning systems and their impact on business.
It also takes into account retail trading hours, workers’ compensation premiums, duties on insurance and licences and a state’s requirements to do business. The report assesses the settings in place at mid-2026.
Victoria falls to last on business conditions
Victoria has dropped four places to last in the latest rankings, with South Australia topping the list as Australia’s most favourable state in which to do business for a fourth year in a row.
They are followed by Tasmania, the ACT, the Northern Territory, NSW, Queensland and Western Australia.
“South Australia cemented its standing as the best place to do business in Australia, showing that sensible regulation and less red tape can make a real difference to businesses, workers and communities,” Black says.
Cost and regulation account for 70 per cent of the overall score, with planning making up the remaining 30 per cent.
Victoria’s Planning Amendment (Better Decisions Made Faster) Act, passed in February, will create three permit streams with 10, 30 and 60-business-day decision timeframes and limit third-party appeal rights. The BCA says it supports the reforms, but notes other states have already made planning changes. Victoria’s main reforms will not take effect until October 2027.
Despite Victoria’s average decision times improving 15 per cent for standard development applications and 20 per cent for major applications year-on-year, it hasn’t been enough to prevent the state falling to last for planning efficiency, replacing NSW at the bottom of the ranking.
NSW planning reforms start to show results
NSW has risen from eighth to seventh in planning, its first improvement in the four years the BCA has published the rankings.
Tasmania has overtaken South Australia as the top-ranked planning jurisdiction, and the Northern Territory has climbed three places to third.
“Reform is starting to show up in the data,” Black says. “Tasmania leads on planning, and NSW is moving in the right direction.”
NSW decision times have improved 20.8 per cent for standard applications, 15.7 per cent for major applications and 23.1 per cent for building approvals.
The state has overhauled its Environmental Planning and Assessment Act and made the Housing Delivery Authority permanent. Since July 1, it has also channelled agency referrals through a new Development Coordination Authority.
NSW still scores lowest of any jurisdiction on developer contributions, which the BCA attributes to their cost and uncertainty. It ranks sixth for consistency, dragged down by roughly 170 environmental planning rules.
The Northern Territory now records the fastest average determination times for developments above $30 million and the second fastest for those below.
Property taxes widen the gap between states
The ACT ranks first on property taxes and charges, followed by Tasmania and South Australia.
The ACT has no land tax on commercial property. This year it increased its fixed land tax charge on residential property, but lifted the duty-free threshold for commercial stamp duty.
South Australia charges no stamp duty on commercial and industrial property. It raised its land tax thresholds by about 12 per cent and kept its top marginal rate at 2.4 per cent.
It is also the only jurisdiction to index land tax thresholds annually. By contrast, NSW’s thresholds remain frozen at 2024 valuations.
According to the report, Victoria has the third-highest land tax rate for domestic owners, the highest for foreign owners and one of the country’s highest stamp duty rates.
The calculations exclude Victoria’s transition from stamp duty to the Commercial and Industrial Property Tax, as well as ACT general rates and location-specific levies.
“Businesses across Australia are being buried under mountains of red tape, wasting time and money that could be better spent serving customers, hiring more workers and growing their businesses,” Black says.
“We know we can’t regulate our way to growth. Unnecessary red tape drives up the cost of doing business, and those costs ultimately flow through to everyday Australians, whether they’re buying a cup of coffee or doing their weekly grocery shop. Cutting red tape means lower costs for businesses and better outcomes for Australians.
“No state or territory has it all, and everyone can lift their game by learning from what others are doing well.”
