This article is from the Australian Property Journal archive
The New South Wales Government’s latest budget has missed an opportunity to provide relief to investors and businesses, according to the Property Council.
Yesterday, the Property Council has missed an opportunity to provide relief to investors and businesses after last year’s 21% increase in the land tax rate.
Property Council of NSW executive director Ken Morrison said the land tax averaging system is a very positive measure which will smooth out the yearly swings in tax bills, but taxpayers are still asking why their land tax rate went up by 21% in last year’s budget.
“What is needed is a program of staged land tax cuts to benefit both business and individual investors.
“The NSW Government has more than trebled its revenue from land tax since coming to office a decade ago. We need a rate reduction to compensate for our high land values,” he added.
“The deplorable position that NSW finds itself in, giving away $3 billion in GST revenue every year to the resource-rich States, cannot be forgotten,” HIA’s NSW executive director Wayne Gersbachsaid.
“The recipe for recovery, however, is well-known. The housing industry is ideally placed to respond to modest, targeted stimulatory measures as it can quickly generate investment, jobs, and government revenue. It is a shame that the Budget has not pursued these opportunities,” he added.
According to the Property Council, almost 57,000 businesses pay land tax compared to just 28,600 who pay payroll tax.
The Property Council has also welcomed the Government’s big increases in infrastructure expenditure, the use of debt funding, and its commitment to find savings in recurrent expenditure, warning that future surpluses would be in peril unless spending was kept to budgeted levels.
“The Government is to be congratulated for embracing the sensible use of long term debt to invest in long term infrastructure to drive economic growth, however the budget missed key projects which would provide big boosts to the NSW economy,” Morrison said.
Gersbach said it is encouraged by the State Government’s $110 billion infrastructure plan and the decision to borrow substantially to fund the next four years of projects, effectively killing off the longheld view that debt is bad.
“On the back of a pretty raw GST deal and electorate misgivings about Government debt, the decision to increase borrowings to fund the infrastructure program is indeed gallant.
“Whilst the effort is commendable, it alone will not get the state going. The Government needs to ensure the speedy delivery of projects. Allowing the private sector to provide infrastructure to new residential developments instead of state corporations is one way of ensuring more efficient delivery. Industry can bring these solutions to the table,” Gersbach concluded.
“The decision to increase public debt to fund this investment is right – it makes economic sense and it has public support,” Morrison said.
The Government will also establish a Property Authority to centrally manage generic Government assets, which will provide savings in the Government‘s $80 billion property portfolio.
By Adam Parsons
