THREE JOB-CREATING IDEAS FOR WA’S GST
The Property Council is delighted with news that the GST reform package has been passed by the Senate. Western Australians have been working hard for over a decade. We’ve been a net contributor to the Australian economy. Many of us feel we’ve been doing the lifting while the other states have been doing the leaning.
Our collective frustration at receiving such a small proportion of the GST collected in WA – a low of 30c in the dollar – has finally resulted in action. The Federal Government solution is very welcome, an injection of $1.7 billion in GST top-up payments over the next three years to address the imbalance. The Property Council, along with many Western Australians, congratulates the Federal Government and Premier Mark McGowan on delivering this fix.
Now that our State Government is set to receive our share, our attention is turned to how this significant injection of funds should best be spent. The State Government have confirmed that they will be using the top-up payments solely to reduce WA’s debt. While it’s certainly prudent of the Treasurer to use some of the money this way, it’s also worth considering alternatives that will stimulate growth in our economy.
Like any household that receives a windfall, sensible consideration needs to be given to how to spend it. It makes sense to pay down debt, like the home mortgage, but it is also sensible to put some money into new investment that will pay dividends in the future.
Our Premier and Treasurer find themselves in this position. They need to weigh up the costs and benefits of paying off debt versus investing for the future. And they need to consider how to create jobs, stimulate the economy and provide income growth for as many workers as possible
Quite simply, the industry that will have the best prospect of delivering returns – both short and long-term – is property.
The property industry is WA’s largest employer. It employs almost three times the number of people that mining does. From tradies to real estate agents, valuers, lawyers, architects and building managers, success in the property sector flows on to service providers everywhere.
The property industry provides jobs for more than 205,000 Western Australians, pays more than $6bn in state taxes (around a third of the State’s tax take) and contributes $31.8bn in Gross State Product. Getting this sector of the WA economy firing will benefit us all.
With $1.7bn in GST revenue to pay down debt and/or invest, the Property Council is promoting three ideas that will immediately provide growth in jobs and set up Perth for the future. They are transformative ideas for our City that will attract tourism and residents for decades ahead. They are a smart investment in our future.
1. INJECT VIBRANCY INTO PERTH CITY PRECINCTS
Great cities of the world are filled with well-known, desirable inner-city neighbourhoods, or precincts that are perceived to have a different ‘vibe’. Perth lacks management of parts of the city as distinct places. Our policy settings and regulations are one-size-fits-all. Consequently, there’s little differentiation which reduces the pride, attachment and sense of place associated with great places.
Visitors to Perth often perceive our city as a ghost-town compared to other international or east coast cities. That contributes to a feeling of concern for personal safety and security, especially at night. It’s an unwarranted perception, as the Perth CBD is one of the safest in the world. We need to fill the city with bustling activity and life to make visitors feel excited and inspired, and happy to recommend a holiday to Perth to their family and friends.
The State Government can make the residential densification of the inner city a key priority – by removing barriers and providing incentives. The Government can support precinct management and strategic place positioning by designing and implementing place-specific streetscape features (landscape, signage and other urban theming) to help define areas and streets. Providing grants for projects that fulfil these objectives to organisations that are committed to creating great places is the fastest way to make it happen.
To attract residents to live in Perth, high-quality residential development can be achieved through increased incentives. Plot ratio and other development bonuses for residential developments in the CBD will set residential land uses on another level commercially and make projects viable.
2. REMOVE UNFAIR TAX PENALTIES
Removing the stamp duty penalty for off-the-plan property purchasers will stimulate demand in the tentatively-recovering property market and create new jobs.
In WA, apartments are pre-sold off-the-plan with stamp duty payable on the full sales price of the new dwelling. In contrast, for new single-dwelling lot sales, stamp duty is typically payable on the land component only, not the separate home building contract. As the State Government seeks to encourage development in popular inner city and suburban locations to meet the target of 47 per cent of new dwellings in infill locations, removing this discrepancy would be a smart move to encourage infill development.
3. INCENTIVISE SENIORS’ RIGHTSIZING
Reducing stamp duty costs for eligible seniors that are rightsizing their housing needs is a way to overcome some of the hesitation of people who are considering a move from the large family home into smaller, more suitable property. WA is facing a growing and serious problem of limited access to diverse housing options for seniors, and this policy will go some way to relieving the affordability barrier. It will also encourage innovation in the seniors housing market and provide a boost to our economy as property transactions increase.
There are opportunities all over Perth to create exciting new precincts and hubs for shopping, employment and recreation. METRONET presents the ideal opportunity to develop great places around stations. This will be facilitated by new Community Titles legislation, and industry is willing and able to develop exciting mixed-use developments that combine retail, commercial and residential activities, the likes of which we’ve not seen before in Perth.
For this to be a reality, it can’t be done without some investment up-front from State Government. Adjusting stamp duty to incentivise CBD residential development, apartment construction and seniors’ rightsizing are what is needed to make vibrant precincts viable and create jobs in the short term, especially in the case of METRONET.
Part of the GST windfall invested wisely now will deliver the McGowan Government’s plan for jobs and realise its vision of creating a vibrant Perth city for the future.