Earlier this month the ACT Chief Minister, Katy Gallagher, made a welcome announcement, that her government would undertake a review of property fees as part of a plan to develop an economic stimulus plan for the Territory.
At the top of the list of fees to be reviewed are penalties which apply for failing to commence and complete work on commercial, industrial and mixed-use sites. The Property Council has long opposed these charges which can amount to hundreds of thousands of dollars in an environment where construction activity and investment has slowed due to factors including lack of demand for new commercial office space because of Federal Government cut backs.
Indeed, all evidence points to a property and construction sector under considerable pressure with financing for projects uncertain and vacancy rates remaining high. In the current economic environment it is therefore welcome that the ACT Government is seriously considering these matters, and looking to facilitate development and investment through a measured policy-driven response.
In terms of the Territory’s economy it is worth remembering that the property and construction sector in Canberra is our second largest employer after the public service, generating around 25,000 jobs across the ACT.
The sector contributes $2.6 billion each year to the ACT economy – just under 10 per cent of the Territory’s total wealth – and a further $3.0 billion in flow-on demand for goods and services, bringing the total contribution to $5.6 billion annually.
It more than pays its dues, contributing more tax than other industry – around $600 million a year, or over half of all Territory taxes.
And, the property sector pays 23 cents for every dollar generated in economic growth – a figure far in excess of the average of 4 cents among other industries.
The property and construction industry plays an absolutely central role in the future of our city, and will always be a major contributor to the economy.
For that reason, it makes sense for government to work with the property and construction industry to create the right policy settings to ensure we have a business environment that supports innovation, economic growth and which attracts investment.
Abolition of commence and complete fees on commercial, industrial and mixed-use sites would send a strong signal to industry locally and interstate that the ACT is open for business.
Catherine Carter is ACT Executive Director of the Property Council of Australia