State Budget Mid-Year Review: UDIA offers recommendation on expanding Keystart and a warning on DesignWA
UDIA has requested that the state government leverage improving financial conditions to revise Keystart eligibility criteria.
In releasing the mid-year budget review today, the state Treasurer Ben Wyatt advised that the government expects the budget to reach surplus one year ahead of schedule in 2019-20. He also reconfirmed the government’s commitment to increasing the Keystart borrowing limit by $420 million.
UDIA believes now is the time to seize the opportunity to expand Keystart’s eligibility criteria to support more potential home buyers into the market. Given the tightening of institutional lending criteria and the impact of the banking royal commission, we believe that expanding the Keystart eligibility criteria at this time will be essential for households to get their foot in the home ownership door.
UDIA has also advised that the development industry is keen to see work on proposed METRONET precincts move forward, however suggested the government needs to be mindful of creating additional cost impacts on industry as a result of initiatives such as DesignWA and the impact it will have on delivering affordable housing within the METRONET precincts.
For more details on our position see our media release here.
For the full mid year budget review report, download here.
Labor releases affordable housing plan ahead of federal election
The Federal Labor Party announced a ten year plan in relation to housing affordability at the Labor National Conference on Sunday. The plan includes a $6.6 billion ‘affordable rental plan’ that it says will see 250,000 new homes built across the country over the next decade.
According to Labor, the program will provide annual incentives of $8,500 per year for 15 years for newly constructed properties that are owned or managed by a registered community housing provider and they will be mandated to provide 20% below market rent for eligible Australian tenants on low and middle incomes.
This policy is a step in the right direction for growing the stock of affordable homes available to those that need them, as well as providing a much needed boost to the construction industry.
However, UDIA is concerned that Labor’s current position on negative gearing and capital gains tax will jeopardise the broader supply of affordable rental accommodation that is delivered to the market via private ‘mum and dad’ investors each year.
At a national level, UDIA is focusing on advocating for negative gearing and CGT regimes to remain unchanged and will continue to represent our members strongly on this important issue.
For more information on Labor’s latest plan, view the statement here.
Latest FHOG data released
According to Department of Treasury data, First Home Owner Grant applications for new homes in WA fell by 22% in annual average terms to November 2018. UDIA can attribute the steep decline to the artificial boost in applications for grants that occurred in mid-2017 due to the removal of the FHOG boost which brought demand forward.
While down slightly, current figures are back to more normal levels and first home buyers remain a significant proportion of the market in Western Australia, highlighting the importance of supporting that sector into home ownership.
Data can be downloaded from here.
UDIA meets with Director Planning Lands and Heritage
Tanya Steinbeck met with Gail McGowan earlier this week to maintain and further develop the positive working relationship with the Department of Planning, Lands & Heritage and the UDIA. Planning reform is the key priority for the Department and the Minister in early 2019, along with Design WA. Concerns around the cost impacts of Design WA’s Apartment Design Policy on the affordable end of the apartment market were highlighted, with a request to release the data behind the financial modelling done during the consultation process. Recent decisions made by JDAPs were also raised as an issue that UDIA are watching closely.
Promising 2019 ahead for Keystart
UDIA WA CEO Tanya Steinbeck, along with other key industry bodies and stakeholders attended a dinner last week with Keystart Chair, CEO and staff. The Keystart team are looking forward to a bigger and better year in 2019 with the increase in the loan book, and took on board suggestions from around the table to consider expanding the eligibility criteria to help more homebuyers get into ownership.
GST at settlement – update from the ATO
Roadmap of enhancements for the GST at settlement measure
The review of the current administration of the GST at settlement measure was undertaken with industry, this identified what is working well and what could be improved. Thanks for your feedback. We are now releasing a roadmap of enhancements that we have or are intending to deploy. Enhancements listed in this roadmap are planned to be deployed from October 2019 onwards. When further details on the scheduling of particular enhancements are available we will provide an update.
Please see here for roadmap paper for further information.
Lodgement of the business activity statement (BAS) by the supplier
It’s important for suppliers to bear in mind that withholding by a purchaser does not remove the suppliers obligation to report the property transaction on their BAS as per usual, reporting the sale at G1 and the actual GST amount at 1A. Our risk model has identified some instances of suppliers not correctly reporting the property transaction. These suppliers are being contacted to educate and assist them amend their BAS.
Inquiries about supplier credits
If a vendor/supplier has a query about their GST property credits they can email their inquiry to GSTatsettlementnoreply@ato.gov.au. When doing so they should provide the following details:
- Details of the inquiry
- Supplier name
- Supplier ABN
- Purchaser name/s
- Credit amount
- Lodgement reference number (LRN) or payment reference number (PRN)
- Property details
- Settlement date
- Preferable contact name and number
Consumer Confidence remains above long term average
According to the latest CCI WA Consumer Confidence Survey, West Australians’ confidence in the economy remains above the long-term average, however growth is subdued this quarter on the back of surging petrol prices, tighter lending conditions, rising mortgage interest rates and mounting household budgetary pressures such as transport, groceries and utilities.
Three out of five consumers (60%) cited cost of living pressures as their biggest dampener on confidence. Lower income households are feeling the pinch the most, with 44 per cent of West Australians stating that their finances had worsened this quarter – almost double the number of higher-income earners.
Although confidence has wavered since last quarter, West Australians short and long-term outlook remains optimistic, with more West Australians believing the economy will be stronger (42%) rather than weaker (19%) in twelve months’ time – the highest proportion since February 2013.
Read the full report here.
Unemployment rate increases in WA
According to the latest figures from the Australian Bureau of Statistics, the trend unemployment rate increased in Western Australia this month (up 0.1 percentage points to 6.3 per cent).
Despite the slight rise in unemployment, the trend participation rate actually increased in WA by 0.1 percentage points to 68.9 percent.
More information here.
We want your feedback!
UDIA is currently working on several submissions on behalf of members. We encourage you to forward any feedback to these items to policy@udiawa.com.au
Local Government Act Review, submissions closing 31 March, 2019. More information here.
DWER Review of thresholds for uncontaminated fill – Consultation paper (available here). Submissions close Friday 18 January, 2019.
Draft SPP 2.4 Basic Raw Materials (available here). Submissions close Friday 25 January, 2019.
Festive Season shut down
The team at UDIA WA wishes all our members, friends and families a happy and safe festive season and we look forward to working with you in 2019!
Please note the UDIA WA office will be closed on Monday 24 December and will reopen on Monday 7 January 2019.
Bushfire Mitigation Forum outcomes now available
A statement of outcomes from the inaugural Bushfire Mitigation Forum is now available.
The outcomes will help to shape the direction of the Department of Fire and Emergency Services’ Rural Fire Division and the Bushfire Centre of Excellence.
Major themes from the forum included working through issues of responsibility for mitigation activities to try to achieve better community safety results. There were also calls to break down silos, address potential top-down or ineffective communication practices and avoid unnecessary complexity.
More information here.
New Australian accreditation scheme for cement and concrete users
CemAssure has launched of a product testing and accreditation scheme that provides third-party assessment of cement, fly ash, slag and amorphous silica products – all materials commonly found in concrete products used across the Australian construction industry.
The scheme is designed to provide assurance to building designers and specifiers, as well as consumers, that these products have been independently verified as being fit-for-purpose and conforming to the relevant Australian Standards.
Under the new scheme, manufacturers and suppliers of cementitious materials can apply for their products to be tested, accredited, registered and publicly listed on the CemAssure website.
Conformity is third-party assessed and maintained by inspection of test reports for individual products, laboratory accreditation reports, and a yearly co-ordinated material test program.
All cementitious material suppliers are invited to apply to register a product under the CemAssure scheme. Application forms are available on the CemAssure website: www.cemassure.com.au
Federal government mid-year review
The Federal Government has received $8.3 billion more than it expected in the first half of this financial year, thanks largely to greater collections of individual and company taxes.
According to the Mid-Year Economic and Fiscal Outlook, it now expects to deliver a $4.1 billion surplus in 2019-20. The forecasted deficit for this year has been cut from $14.5 billion to $5.2 billion.
More information available here.