The Treasurer’s last budget before the State election has given the property sector a small boost but also missed opportunities to address key investment barriers and rebuild the industry’s confidence.

Executive Director of the Property Council of Australia (Tasmanian Division) Mary Massina said that while the Property Council welcomed help for the ailing residential construction sector with the targeting of the First Home Owners Grants for new homes, much of the bonus would be eroded by galloping Government costs and charges.

“On the face of it this is a positive initiative, but the Premier has failed to acknowledge that the money given with one hand is being taken away by the other, swallowed up by increasing utilities developer charges and connections.

”Action to fix this is desperately needed, as without reform this money isn’t about stimulus, it’s about churn.”

Ms Massina said that while the Property Council welcomed payroll tax concessions as an important business tax reform, this change did nothing to reduce the Government’s continued addiction to property tax revenue.

“The budget papers show that the property industry continues to pay the lion’s share of total state tax revenue – in both per cent and dollar terms – through land tax, stamp duty and fire service levies.” Ms Massina said

It is expected that in 2013/14 the property industry will contribute 32 per cent of the total tax revenue or $304 million.

“The property industry is funding the State Government’s infrastructure ambitions through this tax revenue; while the property industry is willing to pay its fair share of taxes to ensure infrastructure is up to the task, the Government’s reliance on our sector is unhealthy and unfair.

“Future surpluses and Tasmania’s investment pipeline must be built on savings, public sector and GBE efficiencies and private sector economic activity. No Government should try to tax its way out of its service and infrastructure obligations.

“Other much-needed initiatives such as local government reform, red and green tape reduction and planning reforms have been ignored in this budget.

“It’s a missed opportunity to break the business-as-usual cycle, which has clearly not been working.

“The failure to address key barriers to further investment in Tasmania through funding and reform agendas effectively means that the Government has missed the opportunity to stimulate the private sector.

“As the biggest private sector industry, the property industry views this last budget before the 2014 election as one of a hit and several misses, and it won’t do much to rebuild industry confidence, investment or jobs.
Mary Massina, Executive Director, Property Council of Australia