Victoria has been ranked the nation’s worst performing jurisdiction for commercial enterprise for a second consecutive year, while South Australia claimed premier position in the Business Council of Australia’s annual audit.

The assessment, detailed in the peak corporate lobby's latest scorecard and reported by ABC News Business, highlights a widening divide between jurisdictions actively pruning regulatory hurdles and those resorting to heavier fiscal interventions. Victoria slumped to the bottom of the table amid persistent industry grievances regarding ballooning debt, rising payroll levies, and regulatory bottlenecks that have chilled private capital deployment across Melbourne and regional centres.

Victoria languishes under tax burden

The Victorian government's reliance on increased property taxes and targeted levies to service a state debt projected to surpass $180 billion by 2027 has drawn sustained reproach from industry leaders. According to the Business Council scorecard cited by ABC News Business, commercial sentiment in the southern state continues to suffer under the weight of higher compliance demands and land-tax surcharges introduced across recent state budgets.

Enterprise leaders have repeatedly cautioned that Victoria’s fiscal measures—originally designed to rebalance pandemic-era expenditures—are increasingly discouraging foreign direct investment and hampering local job creation relative to interstate rivals.

Adelaide surges on regulatory reform

At the opposite end of the spectrum, South Australia secured top honours by cultivating a more predictable and competitive regulatory landscape. The Business Council's metrics rewarded South Australia’s aggressive pursuit of streamlined planning approvals, targeted workforce development, and disciplined corporate tax settings.

Policymakers in Adelaide have deliberately pitched the jurisdiction as an agile, lower-cost alternative to eastern seaboard hubs, capitalising on critical minerals, defence procurement, and renewable energy investments to sustain commercial momentum.

Rising stakes for interstate competitiveness

The annual index serves as a benchmark for state premiers seeking to attract major corporate headquarters, infrastructure development, and skilled migrant labour. While New South Wales and Queensland registered mid-tier evaluations characterised by balanced but occasionally encumbered operating environments, the gap between the highest and lowest ranked states has widened significantly.

Analysts note that capital mobility within the Australian federation has accelerated, with firms demonstrating greater willingness to shift operational footprints to jurisdictions offering lower baseline friction and more coherent planning systems.

The productivity challenge facing treasurers

The Business Council has underscored that national productivity growth remains fundamentally tethered to state-level reform agendas. Sluggish productivity gains across the domestic economy have intensified calls for treasurers across all state capitals to phase out inefficient stamp duties, reform payroll tax thresholds, and dismantle overlapping bureaucratic processes.

With fiscal pressures mounting across the federation, the scorecard reinforces an uncomfortable reality for Victoria: without meaningful structural recalibration, mobile investment will continue migrating to friendlier shores across the border.