Growth is the Word in WA Budget

It was telling that the Treasurer’s Budget speech this year used the word ‘growth’ 32 times and on all but eight occasions, it was used to describe the urgent need to drive economic prosperity in WA. This was a good start because growth is what the Property Council advocated in the lead up to the Budget.

So how did the Budget stack up against the property sector’s expectations and what is the bottom line for property in the Budget? 

Well we gave the Budget a score of 7 out of 10, which is a good pass. This is because the Treasurer recognised that the household sector is expected to be a key driver for economic growth in WA, in the absence of another resources boom soon.  

And guess what will be a major trigger for this growth? Development and construction. 

Local property markets will respond positively to the decision not to increase land tax and stamp duty after big rises in earlier Budgets. The freeze on property taxes will support early signs of a turnaround in key markets, including the trade-up end of residential real estate and commercial property investment. 

The freeze on the Perth CBD car parking licencing fee is perfectly timed to help struggling retailers to attract shoppers to the city centre. City retailers are reporting that the best way to get people back into the city is to reduce car parking costs and the freeze on the licence fee will make a big difference. 

While we have concerns that a foreign investor stamp duty surcharge will be introduced at a time when we should be attracting foreign investment we are pleased that the Government looks set to avoid the mistake of some eastern states that taxed developers wanting to deliver new supply.  

If a foreign investor surcharge is backed by well-designed legislation, the commitment to exclude investment in residential developments of 10 or more properties means companies simply wanting to create new projects can get on with the task of adding new supply and generating jobs. 

The $1.3 Billion funding commitment for stage 1 of Metronet is very important for development and construction companies and their employees, lining up for work around key stations. Metronet will be the biggest urban renewal project Perth has ever seen and it was critical that funding was in the budget to give business the confidence to gear up for the work. 

The industry will want more information however, about the $104 million revenue expected from land sales and value capture to fund Metronet stage 1. We will be consulting with the Government about their plans to use value capture and where the land sales will occur. 

A few things that were not in the Budget that the Property Council will follow-up on, include the more pubic private participation in major infrastructure projects, tax incentives for seniors downsizing and the reconsideration of asset sales to fund infrastructure investments.