The 2016-17 Budget forecasts for growth and jobs depend on continued strong performance by the construction sector says the Property Council of Australia.
“This Budget confirms that the continued strong performance of the property industry is vital if the Australian economy is to keep delivering jobs and growth,” said Ken Morrison, Chief Executive of the Property Council of Australia.
“There is good news in this Budget for the industry – record infrastructure investment continues, there is certainty over property taxation and business stimulus measures are provided.
“The current negative gearing and capital gains tax arrangements are vital if our industry is to continue to deliver strong growth.”
Mr Morrison said the Budget forecasts rely on continued strong performance by the property industry.
“We are currently moving through the top of the construction cycle and the Budget forecasts this to continue for another two years, with economic growth also to lift to 3 per cent.
“To deliver this growth will require a concerted effort by all governments. It will rely on continued reform of state planning regimes, continued strong investment in infrastructure, steady consumer confidence, and certainty in taxation arrangements.
“There is a strong economic case for the Commonwealth to work with the States and Territories and deliver housing supply incentives. Last week, the Property Council released a paper that detailed how these incentives could work. Our estimates are that they could deliver $3 billion in economic uplift.”
Mr Morrison said he was disappointed that the Budget contained no plan for further reform of Federal-State taxation arrangements.
“It seems the Government has given up on state taxation reform.
“We know state tax reform is difficult, but it is essential if we are to boost growth over the long term.
“Whatever benefit Australians will get from cuts to company law and PAYE taxes over coming years is offset by the drag on our economy from inefficient state taxes.
“Stamp duty, in particular, is a drag on growth and jobs as well as a huge hit on homebuyers and investors. If we are to have meaningful tax reform, the States and Territories have to be part of it.”