Sad to say it out loud. More so as a Victorian myself.
Victoria is Australia’s ball and chain on international investment.
The Victorian Government’s positive words on investment are at odds with the state’s actions on tax settings and planning. They amount to system wide risk for investment in the state.
Worse, these government actions, punitively coordinated or hopelessly accidental, are diminishing international investor appetite for constant returns from real property across Australian cities even beyond Victoria.
Many institutional investors are voicing private concerns about reliable returns in Australia, starting with Melbourne. Less overseas investment reduces the speed of construction of the property assets our cities and communities need.
To be clear. This is not about the government leaving Victoria’s brand and cultural flagship, the city of Melbourne, to bleed out with no physical government patronage after the pandemic. Still happening.
This is about Victorian policy settings saying the exact opposite of the claims made by Victorian Government’s leaders.
Victoria was once our nation’s gold medal winner on planning. It was the Hawke and Keating government of housing supply. To read the government’s media releases today, the state retains ambitious on housing and infrastructure priorities. And yet.
2024 Victoria equals slow, slow planning outcomes for residential and industrial projects. Targeting 80,000 homes annually with an actual run rate of 59,000 in a hot year.
There are some positive initiatives in the pipeline. They won’t add to supply quickly and may ultimately makes things harder if they don’t address greenfield settings right now. Add to that ongoing stalling in resolving industrial land planning with the Commonwealth.
This all said, planning at least may be fixed.
Wait till prospective and existing investors review the government’s stale routine of bringing on ever newer, higher and changing property taxes.
It is almost quarterly tax change for the worse in Victoria. From land taxes and rezoning taxes through absentee owner surcharges directly impacting offshore appetite for investment all the way to the incredibly ill-considered expanded vacant land tax soon coming into play there is a lot to make institutional capital consider other options.
Investors are now raising it as a matter of course with our members. Of course they won’t risk existing contracts by going public. Why would they?
Especially when the Victorian Treasurer is a robust communicator. When not towelling up premiers from other states over the GST, he’s spinning off fairy floss lines about the property sector actually benefiting from his new taxes and tweaks.
Sounds like a regular Robin Hood until you remember current and new Victorians end up being the ‘cost of living’ victims of the added-up effect of those ever-worsening government investment settings.
Note too that, when pressed, Victorian Cabinet ministers will quietly scoff that taxes on overseas institutional investment or property development – ‘foreigner taxes’, taxes on the ‘big end of town’ – are popular. That means they focus group well.
Fun stuff for fans of focus group politics except that Victoria needs more than government investment, especially where the budget bottom line is still in repair, to build all the good parts of its cities.
What can be done?
The government should listen to what our Victorian team has been saying for many months.
The Victorian Government’s policy and tax actions must bypass the budget “let’s get the property investors” pantomime and start to mirror their occasional narrowcast pro-investment statements and road shows to investors.
We urgently need to bring back the investors who can bridge the immediate and growing housing and logistics gaps where there is immediate, crisis level need.
Certainly, that also means the constant government tax tinkering has to stop.
The Victorian Government needs a coherent economic development mindset across Cabinet to support the future prosperity of the people of Victoria.
That should include a commitment to no new property taxes nor tinkering with existing taxes till the next parliament.
Does the Victorian Government still have the smarts to pivot from investment repelling settings that bellow ‘don’t invest here.’
The 2024 May budget will be the test.
Vale Jeff Robinson
Every now and then, kind, talented, hard working people who assume the best of everyone, bless you, bless a whole industry, with their friendship.
So it was with Jeff. Funny, bright and big hearted, Jeff made a real difference across the decades in many sustainability leadership roles. And that laugh!
Jeff my friend, in the end you get what you give.
For you that is a whole lot of love from everyone who was lucky enough to know you.
Our deep condolences to the whole Aurecon team, whose lovely tribute is here, and to Jeff’s family and friends.
Vale.