Victoria has been ranked the least competitive place to do business in Australia for the third year running, slipping further behind in a national competitiveness report released by the Business Council of Australia (BCA). The state fell to last place among the eight states and territories, with its planning system rating dropping sharply from fourth to eighth over the past year.
The BCA’s fourth annual Regulation Rumble report evaluates jurisdictions on ten regulatory indicators, including business taxes, regulatory costs, retail trading restrictions, workers’ compensation premiums, licensing requirements, and insurance duties. While Victoria has continued to underperform across multiple areas, South Australia retained its position as the top-ranked jurisdiction for the fourth consecutive year.
BCA chief executive Bran Black attributed Victoria’s poor showing to ongoing challenges that discourage investment and job creation. “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 businesses to invest, grow and create jobs,” he said. Black highlighted issues around payroll tax, property taxes, and business licensing, which remained persistent obstacles despite efforts to improve economic conditions.
The report comes as Premier Ben Carroll seeks to strengthen his government’s pro-business reputation ahead of the state election on November 28. On Tuesday, Carroll announced a plan to waive stamp duty for businesses moving away from discretionary trusts, a response to federal tax reforms introduced by the Albanese government.
Victorian Treasurer Colin Brooks responded to the BCA’s findings by emphasizing the government’s recent economic reforms. “We’ve made billions in commonsense savings, stopped unnecessary government spending and we will cut red tape and cut land tax,” Brooks said. He also pointed to a major overhaul of the state’s planning laws under the Labor government, which he said was facilitating increased homebuilding activity, with Victoria reportedly building more homes than any other state.
Opposition Leader Jess Wilson criticized the government’s approach, accusing it of misunderstanding economic growth fundamentals. Wilson pledged to place business “back at the centre” of the state economy and called Victoria’s rising interest payments “not sustainable.”
The BCA report also highlighted developments in Victoria’s debt financing. While the Victorian Treasury Corporation has actively sought to diversify its funding sources by courting international investors, the share of overseas holders declined slightly to 21 percent as of June 30, 2026, down from 23 percent in early 2025. International asset managers accounted for 15 percent of the state’s debt, while overseas central banks and sovereign wealth funds held 6 percent. Meanwhile, Australian banks increased their share to 47 percent from 42 percent 18 months prior.
According to the Treasury Corporation of Victoria, trading in Victorian government bonds rose 35 percent last financial year to $477 billion amid growing borrowing needs. The corporation attributed the expansion in international investor participation—including a landmark euro-denominated bond issue with strong foreign demand—to structural shifts in domestic bank investment patterns.
As Victoria prepares for the upcoming election, the persistent challenges identified in the BCA’s report underline ongoing debates over how best to enhance the state’s economic competitiveness and support business growth.