Not the right time, not the right taxes

The Victorian Government has given itself a massive 13 per cent pay rise this year thanks to increased property taxes and new taxes on families, jobs and investment.

With wage growth stagnant and unemployment at 6.1 per cent, Danni Hunter, Victorian Executive Director of the Property Council of Australia, said Victorians would have to ask if this was the right time to raise taxes and introduce new ones.

“Victorians pay more than 50 per cent of the government’s tax revenue through property, and with massive hikes on land tax, stamp duty, and investment in new projects, these taxes are anything but fair,” Ms Hunter said.

“There were extremely important announcements in this budget, and as a sector, we welcome the government’s mental health reforms and acknowledge how important they are.

“In addition, we welcome the temporary increase in the off-the-plan stamp duty concession to $1 million and $107 million investment into revitalising Melbourne’s CBD.

“The Victorian Government has heard our pleas to secure construction jobs in Melbourne’s CBD and central city. On current projections, without new apartment projects, this sector of the industry will lose 6,000 jobs per year by 2023. The targeted stimulus measures to attract people back to our CBD as a place to call home is appropriate and will make a valuable difference to the vitality and sustainability of our CBD and central city.”

Ms Hunter said among the good news, this budget highlighted the structural challenge that Victorians face. We cannot continue to rely on property taxes alone to fund our future. Victorians worked incredibly hard last year, we cannot risk that with new taxes.

“Stamp duty will go up 13 per cent and land tax will go up 15 per cent. Victorian homeowners, renters, businesses and investors will pay for these tax increases, on top of the huge portion of tax revenue they already pay. The new stamp duty will hit 50 per cent of homes in 120 suburbs by 2030.

“With NSW and other states working toward rationally reducing their reliance on property taxes, the Victorian Government has demonstrated that it has a very real addiction to this revenue.

“Now is not the time for budget repair and is not the time to over-tax an industry that employs one in four Victorian workers.

“Victorian families will pay more to buy a house that suits their needs. Victorian businesses will pay more in the form of increased land tax and costs on businesses through their office space or warehouses. This, in turn, will flow through to the cost of products and services for every Victorian.”

Ms Hunter said the Victorian Government was out of step with other state governments in its tax-heavy approach to the budget.

“With governments around the country focused squarely on stimulus and increasing investment because they know it is good for jobs and their communities, the Victorian Government has taken the opposite approach,” she said.

“We want a strong Victoria with a stimulated economy. We look forward to continuing our productive and genuine partnership with the Victorian Government and working together to build Victoria’s recovery.”

Media contact: Eric Allilomou M: 0448 291 236 E: eallilomou@propertycouncil.com.au