Breaking the boom-bust cycle in WA

Breaking the boom-bust cycle in WAWestern Australia risks falling hostage to the typical boom-bust cycle unless the government addresses three burning issues, says the Property Council’s new Western Australian executive director, Lino Iacomella.As the WA economy evolves rapidly and transitions in the wake of the mining construction boom, Iacomella says the property industry has a central role to play in “keeping WA growing”.”Our state’s economy is uniquely placed. While some states are trying to kick-start growth, and other states are looking at how to manage their growth, our task is to keep our state’s economy growing.”We’ve experienced 10 years of enormous growth. But the thing that keeps people up at night – businesses, households and politicians – is how we maintain that growth. The property sector can provide the solutions to this question, but we need support.”The state’s largest employer, the property sector pays out more than $11.7 billion in wages each year. The industry also directly accounts for 12 per cent of state economic activity – contributing $31.8 billion in gross state product annually.”The property industry created 205,000 direct jobs in Western Australia last year, and generated more than $6.4 billion in state taxes – that’s more than one-third of all state taxes,” Iacomella says.However, there are three top issues holding the industry back from delivering the growth the state needs: unfair land taxes; local planning restrictions; and transport infrastructure confusion.Three consecutive years of land tax increases have hurt small businesses, investors and traders of mid-range buildings, Iacomella explains, as the Barnett Government expects to reap an additional $184 million this financial year alone.Iacomella says this third round of tax takes was an “overreach”, and that the state needs a “fairer and more efficient tax system”.While Perth’s population is expected to double in size over the next 15 years, the failure of local government planning reform has exposed the property industry to “greater NIMBY backlash” against higher-density development. “For the first time Perth is undergoing infill and higher-density development in the city and inner suburbs. While this is part of the new growth plan for Perth, we are at the mercy of outdated and inconsistent local government planning rules.””The Property Council is determined to reach out to the community to explain the benefits that development brings, but we need local and state governments to also join in – and to fix the planning system so we get the best outcomes for the future of the state.”The third burning issue is the lack of a transport plan for Perth – which includes both public and road transport. “Without a proper transport plan, development is a riskier proposition than in other states,” Iacomella explains.Iacomella has been a steady hand at the Property Council in WA for more than a decade, and has deep experience with research and policy, including time as an economist with the Australian Bureau of Statistics.While he loves crunching the numbers, and developing evidence-based policy, Iacomella is also passionate about engaging directly with the industry.”Our industry produces an essential product – great places to work, live and have fun. It makes the job of advocating for our industry easy, because we are making a genuine and meaningful contribution to growing our state.”With the next state election scheduled for March 2017, Iacomella says the Property Council will continue to “focus on the big issues”.”If these issues are not addressed soon, WA will fall hostage to the typical boom-bust cycle in real estate that can take years to recover from.”