Budget geared for growth needs property

Budget geared for growth needs propertyNo changes to negative gearing and capital gains tax, record infrastructure investment and a Budget focused on jobs and growth are good news for the property and construction industry.”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,” says the Property Council of Australia’s chief executive, Ken Morrison.”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,” Morrison explains.The $ billion infrastructure package, linked to the objectives of the Turnbull Government’s Smart Cities Plan, is an important investment, although the Property Council is keen to see further details on financing options.No changes will be made to negative gearing or capital gains tax arrangements for property investments, and the Treasurer reiterated that removing or limiting negative gearing “would increase the tax burden on Australians just trying to invest and provide a future for their families.”This move has been welcomed by the Property Council, with Ken Morrison saying the current arrangements remain vital for the industry to continue to deliver strong growth.Morrison says the Property Council is disappointed that the Budget contains no plan for further reform of federal-state taxation arrangements and nor does it contain any new initiatives to address housing affordability.”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 Federal Incentives Model for Housing Supply, prepared by Deloitte Access Economics, which finds the federal government could unlock $3 billion in economic benefits through incentive payments to help state governments fix their planning systems.”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 three 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.””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 must be part of it,” Morrison concludes.