Victoria’s hospitality scene—from family-run cafés to bustling bars—is set to breathe easier, with the Allan Government announcing a fresh wave of reforms aimed squarely at trimming costs, scrapping bureaucratic hurdles and creating jobs.
Premier Jacinta Allan, flanked by Treasurer Jaclyn Symes and Planning Minister Sonya Kilkenny, fronted the media at the Terminus Hotel to reveal a $1.35 billion support package for businesses—headlined by a payroll tax threshold rise and overhauled liquor licensing rules.
From 1 July 2025, the state’s payroll tax-free threshold will jump from $900,000 to $1 million. The change means around 6,000 small businesses will no longer pay payroll tax at all, and another 22,500 will see a lighter tax bill. The savings could amount to $14,550 annually for some—cash many businesses say will be funnelled straight into hiring staff or upgrading services.
The measure builds on an earlier increase from $700,000 and arrives at a time when many operators are navigating rising costs, slower foot traffic and tighter margins.
The licensing shake-up is just as substantial. From next July, new hospitality businesses will only need approval from Liquor Control Victoria, with councils no longer required to rubber-stamp liquor licence applications. That means fewer forms, less duplication and potentially a six-month head start for new pubs, bars and restaurants—not to mention up to $7,000 saved per applicant.
Victoria sees about 600 new liquor licence applications each year, while 14,000 existing venues are expected to benefit from a smoother process when seeking licence variations.
And in a move welcomed by restaurateurs and café owners, the government has also made permanent a pandemic-era change allowing outdoor dining without the need for a planning permit. From laneways to footpaths, the rule change gives venues flexibility without tampering with local rules around noise, hours or zoning.
The reforms are part of the state’s broader push to build a more resilient, job-friendly economy. Among other measures:
- The abolition of business insurance duty over ten years, with $780 million saved in the next four
- The shift from stamp duty to an annual commercial property tax, freeing up $50 billion in economic activity
- A $627 million injection in the 2025/26 Budget to fund the Economic Growth Statement in full
Since mid-2020, Victoria has added more than 113,000 new businesses—the fastest rate of growth nationally. Business investment rose 1.6 per cent over the year to March 2025, and the state economy is now nearly 14 per cent larger than before COVID struck.
Premier Allan framed the changes as practical support for real people.
“This is about jobs, jobs, jobs,” she said. “Behind every job is a worker, behind every small business is a family—and I’m on their side.”
“Our cafes, bars and restaurants are what we’re famous for. Let’s give them a hand so they’re not drowning in red tape.”
Treasurer Jaclyn Symes called the changes a “win for small business owners who want to get on with the job”, while Minister Kilkenny said the outdoor dining reform “keeps the best part of the pandemic—flexible, vibrant streets—and lets businesses do what they do best.”
The package lands ahead of the next financial year and comes as state governments across the country search for ways to fuel economic momentum amid higher interest rates and softening consumer demand. While the state’s net debt remains high and budget pressures persist, this latest round of pro-business changes signals a bet that cutting bureaucracy may spur activity without breaking the bank.
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