The Victorian Chamber of Commerce and Industry on Wednesday released its first index ranking the cost of doing business across all states and territories.
Fifty-five per cent of Victorian businesses with operations across other parts of the country said Victoria was the hardest place to do business in Australia.
Only seven per cent thought the Andrews government was doing a good job of reducing the cost of doing business.
The state's businesses paid the highest local and state tax in Australia, at 6.2 per cent of gross state product, with NSW the next highest at 5.7 per cent.
Victoria was the second-worst jurisdiction for the number of permits, licenses and regulation items needed to start a business, with an average of 43 forms required.
The ACT required the most permits on average, at 45, while the Northern Territory has the fewest, on 29.
Almost 44 per cent of Victorian businesses said wait times for government services, including compliance and regulation, are getting worse.
Some businesses reported having to resolve "inconsistent rules or mixed messages" between government agencies that don't communicate with each other.
Victoria was ranked second last for affordability and labour productivity, with tourism gross state product between 2018 and 2019 at $82,273 per worker, behind Tasmania at $78,950. This is compared with NSW which was the highest at $97,478.
Victoria ranked first for skills and labour, with one of the most highly-educated workforces.
However, four out of five businesses said they had difficulty in accessing the labour and skills they needed, particularly in entry-level and vocational positions.
The state was rated second in entrepreneurship and innovation, with a business entry rate of 16.6 per cent between 2017 and 2021, below the ACT at 18.1 per cent.
The chamber's report acknowledged the COVID-19 pandemic's impact on Victoria, with businesses in the state experiencing more disruption than elsewhere.
Industry Support Minister Martin Pakula said the findings reflected "the very difficult pandemic circumstances" the state had faced.
"That's all been quite different in the last few months. I've got no doubt whatsoever that the Victorian economy is going to start roaring back, if it hasn't already," he said.
VCCI chief executive Paul Guerra said, while Victoria had lost more business days than any other jurisdiction, state and federal governments can help the local economy bounce back.
"It's been a really rough two years for businesses," he said.
"In election year, particularly this year when we've got two elections... we want to see the Victorian economy really stand up and come back strongly."
The report recommended Victoria develop a business concierge to streamline business interaction with the government, implement a 'root and branch' review of the tax system and fast-track government approvals, grants and programs.
Mr Guerra said VCCI would advocate for governments to reduce administrative burden and to "innovate" the tax system before the two elections.
The report collated results from round tables and a survey of 746 Victorian chamber members, including 288 members who operate outside the state.
TAX EXPENSES (STATE AND LOCAL) AS A PERCENTAGE OF GROSS STATE PRODUCT 2019-2020
* Victoria - 6.27pct
* NSW - 5.72pct
* SA - 5.68pct
* Tasmania - 5.2pct
* Queensland - 5pct
* WA - 4pct
SOURCE: Victorian Chamber of Commerce and Industry
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