An election budget on the horizon
As the federal government gears up for the budget next week, the Property Council has infrastructure funding and housing affordability in its sights.
Treasurer Scott Morrison will hand down the 2018-19 Budget on Tuesday 8 May. Economists and industry analysts expect this to be an election budget, with sweeteners including income tax cuts and big spending on infrastructure projects.
Property Council chief executive Ken Morrison says last year’s budget was “undoubtedly a housing affordability budget”, which outlined a range of measures to ease restrictions on supply, encourage downsizing and boost incentives for first home buyers.
“This year, we expect the focus to be on infrastructure, with analysts predicting a record spend on road and rail projects. This funding, while welcome, must be aligned with the City Deals agenda to drive economic growth,” Morrison says.
While the 2017 federal budget allocated billions to housing affordability – including a $1 billion National Housing Infrastructure Facility – Morrison says a decade of undersupply will not be addressed in one year.
“We need incentives for the state and territory governments to undertake planning reform that reduces bottlenecks in approvals and compliance costs – costs which are ultimately borne by homebuyers,” Morrison says.
The Property Council’s Pre-Budget Submission outlines five target areas:
- Productive cities: Expand the cities agenda, with funding and reforms, including City Deals for each capital city and incentive payments to encourage states and territories to improve housing supply and affordability
- Housing affordability: Identify land disposal opportunities, incentivise planning reforms, support the build-to-rent asset class and reinstate the National Housing Supply Council
- Ageing transition: Develop a whole-of-government strategy supported by coordinated government policy and targeted funding
- International capital flows: No new taxes or regulations on foreign investment, and a robust solution that ensures the real estate sector can continue to use stapled structures
- Energy security and climate change: Establish an economy-wide target of net zero emissions by 20, implement energy market reforms, harmonise and extend energy efficiency schemes, and provide tax incentives to building owners.
“As Australia continues to grow and evolve, the job of the property industry is to respond to the changes in our country. The best way we can support Australian communities is to make our cities more productive and our housing more affordable, assist the transition to ageing and reduce Australia’s carbon emissions,” Morrison says.
The Property Council’s policy team will be in the budget lock-up to dissect the detail and share insights into the budget’s implications for the property industry.