STATE GOVERNMENT MUST BUILD ON INITIAL HOUSING STIMULUS MEASURES
The Urban Development Institute of Australia (UDIA WA) has congratulated the WA state government on a return to surplus in this year’s budget, however expressed a level of disappointment that this has not led to more significant stimulus measures for the struggling property market.
“The Treasurer should be commended for his careful management of the state’s finances to get us to the point of a surplus in 2019/20 and progress toward his 150,000 new jobs target,” UDIA WA CEO Tanya Steinbeck said.
“While we welcome the temporary increases to Keystart thresholds that are the result of this stronger financial position, we do think that there is more the McGowan government could do to support people purchasing homes,” Ms Steinbeck said.
“The property industry has a significant impact on the WA economy contributing approximately $21 billion to Gross State Product in 2017/18, therefore measures to support households can also significantly boost our economy and local jobs,” Ms Steinbeck said.
“The state government’s revenue, via property taxes in particular, would be boosted considerably if the property market recovery was further supported,” Ms Steinbeck said.
“The budget papers on one hand, recognise the decreased revenues that have resulted from ongoing weaker property market conditions and on the other hand, make predictions in the forward estimates about projected increases in revenue that are expected to come from sources such as transfer duty,” Ms Steinbeck said.
“Unless we see more support for the recovery, the government will not see an increase in revenue from these sources,” Ms Steinbeck said.
FOREIGN BUYERS SURCHARGE
UDIA also believes that the Foreign Buyers Surcharge (the surcharge) is not providing the government with as much revenue as was initially predicted in last year’s budget papers.
“Last year the Treasurer was very enthusiastic about the prospect of about $120 million in expected revenue over four years resulting from the surcharge,” Ms Steinbeck said.
“This year, the surcharge revenue figures are hard to judge given they are buried in the broader Transfer Duty line items,” Ms Steinbeck said.
Last year the surcharge was listed as a separate line item with clear forward estimates related to revenue.
“I just don’t see how that target will be reached given the decline in foreign investment we are experiencing, when attracting foreign investment free of surcharges could have been a unique selling proposition and drive further investment for Perth,” Ms Steinbeck said.
In terms of further market stimulus, UDIA wants to see a stamp duty concession introduced for seniors looking to downsize into more liveable homes.
“As well as ensuring that seniors live in homes suitable to their needs, broader government revenues would benefit from a concession on stamp duty given the greater market activity it would generate,” Ms Steinbeck said.
“Not to mention that it will free up more homes for younger families to access,” Ms Steinbeck said.
“I hope that the Treasurer is true to the advice he gave to us today and considers a seniors stamp duty concession as the state finances continue to improve,” Ms Steinbeck said.
UDIA has also welcomed expenditure on METRONET, redevelopment plans for the East Perth Power Station and other major road infrastructure.
“It is very encouraging to see that construction will start on the Thornlie-Cockburn and Yanchep rail lines this year,” Ms Steinbeck said.
“The precincts around the new stations will create important opportunities to provide a diversity of more affordable, connected housing to the people of WA. “, Ms Steinbeck said. “Infrastructure costs have fallen significantly in recent years, and given the surplus achieved and forecast, there is no better time for the government to invest in infrastructure.”
“We are still keen to find out what the government’s value capture policy will be so that industry has more clarity regarding how that will impact development in those precincts,” Ms Steinbeck said.
Details on Value Capture have not been listed in the budget papers.
“Overall, UDIA is pleased to see that the state is in a more stable financial position than it has been in recent years and we trust that the state government will build on the Keystart initiative and continue to support the property market recovery moving forward,” Ms Steinbeck said.
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