Budget should build recovery momentum
No new taxes or charges for property and boosted infrastructure investment is welcome news for the WA property industry.
Property Council WA Executive Director Sandra Brewer welcomed the State Government’s decision to invest more in infrastructure while also budgeting for surpluses.
“This is a sensible approach, but it also means the WA Government will be able to call on funds to meet new and emerging challenges as we work our way beyond the impact of COVID-19,” Ms Brewer said.
“By shifting their priorities from debt reduction to support and investment over the short term, it shows Government understands the economic challenges facing business and the need to provide a clear signal that it is doing what it can to help those who need it.”
“As one of WA’s big economic drivers which supports 300,000 jobs, we’re pleased the Government has avoided increasing property taxes and charges which would have stifled our industry’s contribution to economic recovery.
Stamp duty on property transactions is expected to give the Government $1.12 billion this financial year, which is almost equivalent to the operating surplus forecasted by the Government.
“It is encouraging to see that the Government continues to provide stamp duty relief for apartments sold off the plan through COVID-19 relief measures. The budget expects the rebate to cost $41.8 million over the forward estimates, an increase on the $29 million originally budgeted when the measure was first introduced nearly 12 months ago.
“That incentive is working, supporting jobs and helping more West Australians into a home.
Ms Brewer said the Budget forecast a fall off in construction activity in 2022-23, and it was vital that the State Government took a longer term view to avoid a boom and bust cycle.
“Part of the solution will be how to get our population growing again to support demand for housing.
“With international migration not expected to return to pre-COVID levels until 2022-23, the lack of population growth could be a major drag on our recovery.
“We’d encourage the WA Government to develop a plan for safely and steadily reopening our borders to domestic and international migrants so we can keep the economic momentum going in future years,” Ms Brewer said.
“We welcome the creation of an Infrastructure Delivery Unit to ensure the $27 billion worth of infrastructure announcements in this budget can be rolled out quickly and enable surrounding development.”
The McGowan Government’s $20,000 Building Bonus grants have proven a boon to the residential construction industry and secured jobs. Further investments in social housing, schools, sports, community and tourism facilities will assist the wider construction industry and professional consulting services.
“Our concern still lies with the commercial and retail property sector who have done it hard during COVID 19.
“More needs to be done to provide land tax relief for commercial landlords who have supported their tenants during COVID-19.
“We estimate that WA property owners have provided over $400m in rent relief to WA businesses, although only $15 million in land tax relief has been provided according to the Budget.
“The burden of supporting businesses affected by COVID-19 has not been fairly shared under this arrangement.
“With WA’s strong health and economic position, combined with a State Budget firmly focused on boosting infrastructure and operational spending, we look forward to a sustained economic recovery in which the property industry will be a significant contributor.” Ms Brewer concluded.
Media contact: Nick Warland | M (08) 9426 1203 | E NWarland@propertycouncil.com.au