An increase in land tax bills will lead to jobs losses due to increase business costs according to Nick Grigoriadis, owner of the Royal Melbourne Hotel.

Tax has increased by almost 400 percent following the Brumby Government’s dumping of a cap limiting annual tax increases to 50 percent.

Mr Grigoriadis is angry that his land tax bill has increased in three years from  $1,926 in 2007 to $57,600 in 2009 .

“It’s going to cost jobs,” he said. “I am letting two full-time staff go next month and reconsidering the casual staff arrangements.”

Grigoriadis relayed his concerns about the impact of the increases in land tax on small business  to Premier John Brumby two weeks ago, and his email was redirected to the Treasurer John Lenders. He yet to receive a response.

“The bigger issue here is keeping people employed. The Government should re-introduce the cap so that small businesses will not be forced to shed jobs.

The Government has sent out the first of 22,000 land tax bills based on property valuations made at the peak of the housing market in 2008. Since then landowners have seen their properties’ value plummet by up to 15 percent.

Opposition Leader Ted Baillieu called the tax grab “madness.” “At the very time the government should be doing everything to preserve jobs, they’re threatening jobs.”

Government spokesperson Matt Nurse responded by saying that a recent Institute of Public Affairs report found that businesses in Victoria pay the second-lowest level of land tax in Australia and if they are experiencing hardship businesses should contact the State Revenue Office.

The Property Council of Victoria is campaigning for a 1.5 percent decrease in rate of land tax because of its impact on business.

“The Government’s over-reliance on property tax could squeeze a lot of Victorians out of business, and the increased costs will at some point be passed on to leasees and in turn consumers,” said Jennifer Cunich Executive Director of the Property Council of Victoria.