Foreign Investment Update

RDC has had significant input into elements of legislation introduced into the federal parliament last week which promises to enhance the operation of Australia’s foreign investment framework but won’t improve housing affordability.

RDC acknowledges the Government’s consultative approach in putting together this reform package after the original policy announcement earlier this year.

While it is good to see the Government taking action to better enforce compliance with foreign investment rules,  RDC has cautioned that these measures will not improve housing affordability.

This legislation, and the regulations that are yet to come, have been developed in consultation with RDC and the Property Council more broadly which will help make sure it operates as intended.

Critically, many of the necessary enhancements that promise to free up and streamline commercial transactions will come through in the regulations later this year.

The proposed land register will be very beneficial to inform policy in the future and should be augmented by better data on housing supply.

We note that the new foreign investment fee regime is set to raise $200 million annually, three times the cost of administering the enhanced compliance measures.

Stamping out illegal foreign investment activity isn’t the main game when it comes to issues around housing affordability.
Improving affordability hinges on abolishing stamp duty and increasing new housing supply.

RDC continues to urge Governments to adopt genuine tax reform and improve planning frameworks in order to ease house price pressures – they are the only meaningful solutions.

State and territory treasurers currently have a very valuable opportunity to make real progress on both these fronts.