The Victorian Automobile Chamber of Commerce (VACC) is hoping tomorrow’s State Budget will deliver good news with major changes to land tax, making it fairer and more affordable for small businesses.

VACC Senior Manager of Government and Public Affairs, David Russell, said VACC represented more than 5000 small businesses in the automobile industry and the current land tax placed an unfair and unsustainable financial burden on these businesses.

“Land tax in its current form is an opportunistic tax on businesses,” Mr Russell said.

“It is no longer a tax on property owners intending to break-up large land holdings (the reason behind its original introduction), rather a tax on business profits and income.

“Recent increases in land tax have caused considerable angst to many small business owners who shouldn’t be targets for huge increases in taxes.”

Mr Russell said the current system meant high land tax payers were not always high income earners. The system was currently capped; however, it needed review as the capping rate of 50% was too high to guarantee real protection for business owners.

“It is perverse small businesses are being forced to consider their trading futures simply because of this tax, which is currently what’s happening,” he said.

“While we’re sure this is not the intended consequence of this tax, it is unacceptable.

“VACC would like to see the introduction of indexation of current thresholds and more appropriate capping to ensure a steady collection of revenue for the Government, but not to severely disadvantage small businesses as it currently is.”

Mr Russell said he expected some benefits to come from the budget hand-down but was unsure exactly what it entailed.

He said the Liberals had vowed to introduce indexation of current thresholds as part of State party policy.