MEDIA RELEASE: ACT BUDGET 2018-19
Diversification of economy, increasing population and huge jobs growth all signs of strong economic outlook for the ACT
The Property Council of Australia’s ACT Executive Director, Adina Cirson, says a strong jobs market, diversifying economy and growing population are shaping a very positive outlook for the ACT economy.
This year’s budget shows the ACT is in good shape overall, with unemployment at 4% - equal lowest in the country and with the second highest participation rate, our economic position is going from strength to strength.
“The face of Canberra is changing– with other sectors starting to pick up against a declining public service, with construction making up 6% of Gross State Product,” Ms Cirson said.
“There can be no doubt that the property sector is a driving force behind the diversification of the Canberra economy – when we know that 57.5% of taxes and charges collected are coming from the property sector, and that we employ one in seven Canberrans,” Ms Cirson said.
The strong economic outlook and jobs growth continue to attract people to the ACT with the population forecast to rise to 500,000 in the next ten years, supported by natural increase, international migration and a growth in interstate migration. “We agree with the Chief Minister who today stated that with a diverse economy and community, there is a need for government to step up especially as we plan for managing growth to meet the needs of current and future Canberrans.
“That means that we need increased infrastructure investments which match the future population growth of our city. Unlocking land and creating new investment opportunities are critical over the longer term.
“After a record infrastructure spend in last year’s budget at nearly $1 billion, this is falling away in coming years with only $126 million new capital works expenditure in 2018-19. “At a time when the federal government is uninterested in investing in Canberra we need the ACT Government to make the important investments for our future.
“With the ACT economy now growing faster than any other jurisdiction in Australia (GSP State/Territory - ACT 4.6 % actual growth above National average of 2.1%) we must ensure we are not overtaken by our own growth and lagging infrastructure investment,” Ms Cirson said.
The housing market remains buoyant with demand for free-standing housing remaining high. The indicative land release program will see an additional 17,000 new homes over the next four years. The has been a significant increasing in building approvals over the last 12 months, and Canberra’s residential property market remains robust supported by low interest rates, strong employment and population growth.
“Abolition of stamp duty for all both new and established homes for first home buyers earning under $160,000 will give a good leg up to those wanting to realise the great Australian dream. “We are however looking to the government for further funding of housing affordability measures – and certainly look forward to the release of their housing strategy later this year,” Ms Cirson said.
“We were also disappointed that the reform program in the commercial sector has not continued, with no lifting of the threshold for stamp duty abolition for commercial properties worth more than $1.5 million beyond 1 July 2018.
“Our members are seeing the pain of tax reform in increases in commercial rates – with expected revenue up again by 11 percent over the next 12 months ($172 million increasing to $190 million next year) when we are not seeing the same increases in commercial office rents – we would have expected commercial stamp duties to continue to decline which they clearly aren’t – expected to rise 34 percent this year alone,” Ms Cirson said.
We also note increased revenue measures including abolition of general rates early payment discount and increased landholder duty compliance appear to be the main revenue implications for the property sector.
“It is important that managing growth and ensuring ACT has a competitive and transparent rates regime against other jurisdictions remains a concern, especially when the government is moving to invest more in business development.
“We continue to watch closely the impact of being the only jurisdiction to be undergoing tax reform at this time – and whether it can ever be the panacea it is held out to be by economists and the ACT Government,” Ms Cirson concluded.
Other property sector relevant measures which are welcomed include:
- Increased capital expenditure by the City Renewal Authority for placemaking, future precinct revitalisation works and public realm upgrade projects.
- $1 million for the establishment of a National Capital City Design Review Panel.
- More support for innovation in housing choices ($775,000 over 4 years).
- $12.5 million to progress Light Rail Stage 2.
- Funding for engagement with business and the community for improvement of public places in the Woden Town Centre ($100k) and urban upgrades in our town centres.
- Feasibility for eight micro parks in Civic and other medium to higher density areas.Early planning for the new suburb of Kenny ($550k).
- Removal of income and unimproved land value thresholds under the General Rates Aged Deferral Scheme to benefit our ageing Canberrans.
- Appointment of a Chief Engineer.
- More funding for Work safe inspectors.Increased funding for Brand Canberra – to promote Canberra as a great place to live, work, invest study or visit ($2.1million).
- Nearly $10 million over four years for investment in business development to encourage growth and investment in key industry sectors.
- Funding for a light rail stop in Mitchell on Stage 1.
- Active travel initiatives to improve and expand pedestrian and cycling infrastructure and priority bus stop infrastructure upgrades.
- Energy efficiencies for public housing.
- Design and feasibility funding for Common ground #2 in Dickson $250,000.
Media contact: Adina Cirson | M 0429 579 972 | E [email protected]