Home Property Australia Chief Executive | Victoria’s trust bonfire on tax

Chief Executive | Victoria’s trust bonfire on tax

  • October 04, 2023
  • by Mike Zorbas
Victorian Treasurer Tim Pallas told a Property Council of Australia event that the government would introduce legislation to expand Victoria's vacant residential land tax.

Here’s a tip for state governments trying to reach ambitious housing goals in partnership.

Don’t “do a Victoria”.

Don’t go slow on housing and approvals for the past few years and then seek redemption through a partnership with industry that you set on fire inside a fortnight.

The Victorian planning improvements and targets from last fortnight are needed and welcome, but this week’s hidden tax grabs are a major trust-burner.

Chaotic? Intentional? Government spare change amounts only?

Doesn’t matter. Burning through the trust. Always a bad way to start a partnership.

As Cath Evans, our Victorian ED says so well in today’s media.

“The Affordability Partnership signed on the 20th of September, less than two weeks ago, was an agreement between the Government and industry to work collaboratively to develop policy to address housing affordability.

“The Partnership clearly outlines that consultation is a shared responsibility and that we all agree to work together to find solutions in a complex economic environment.

“Sadly, 8 business days later, the Treasurer, who was a signatory to the Partnership, has announced the introduction of new and expanded taxes without any consultation…and we are yet to understand how these reforms will improve the availability of rental stock to the market or increase the supply of new homes.”

Balancing the immigration mix

No avoiding it.

We need more people working in construction yesterday.

Once in a lifetime infrastructure spending meets big national housing targets.

It’s an uneven competition for scarce labour where housing targets will be the loser if we don’t act.

Non-government sourcing of labour, skilled and unskilled, to build housing will be outcompeted by governments who round up in the billions.

Until we get ahead of these one-off demand lumps in the national pipeline, we will find it ever harder to welcome new migration more broadly.

Immigration frameworks are one of the most fragile licences in any democracy. The solution is not the paradox it seems to be at first glance, but it does involve a politically difficult answer.

To fill the outstanding deficits caused by welcome infrastructure spending we need to immediately boost both the skilled and unskilled construction worker streams of our net overseas migration. Not forever, but soon.

More on this next week.