Infrastructure Plan confirms funding challenge
The Property Council of Australia has welcomed the release of the Palaszczuk Government’s final State Infrastructure Plan, labelling the document a recognition of the Government’s funding challenge.
Queensland Executive Director, Chris Mountford, said the funding of infrastructure is the most significant challenge currently facing the state.
“The final State Infrastructure Plan reaffirms that there is a significant gap between the infrastructure the government can afford, and the infrastructure Queensland needs,” Mr Mountford said.
“As expected, this plan doesn’t contain a magic pot of money, but pleasingly it does identify a number of new strategic actions that do have the support of the property industry.
“These include the creation of an Infrastructure Portfolio Office within the State Government to drive better coordination between infrastructure and land use planning. The lack of coordination between State infrastructure investment and regional and local government land use plans is a major frustration for industry.
“We also welcome the State Government’s commitment to review the current maze of infrastructure grants funding programs in Queensland and investigate a ‘City Deals’ style approach to prioritization and investment. The Property Council has been vocal on the need for both of these actions for some time.
“Given that the Government has ruled out asset recycling, and cannot benefit from the financial windfall currently being experienced in New South Wales, it is not surprising that alternative funding and financing models are a focus of the SIP.
“While this focus on innovation in funding and financing is welcome, the Property Council cautions government about the potential perils of poorly thought through value capture frameworks.
“One of the objectives of the SIP is to unlock economic growth across the State. Poorly designed value capture frameworks are actually just an additional tax on growth. And typically you don’t get more of something by increasing the amount of tax you seek from it.
“Property owners already directly pay infrastructure charges, GST, stamp duty, land tax, local government rates, capital gains tax and a raft of state and local government fees when developing and owning property.
“In Australia property owners carry 9 per cent of the total taxation burden, compared to an OECD average of 5 per cent.
“In this context you can’t just plonk ‘value capture’ models from overseas that are often just another form of tax.
“Property owners are already paying their fair share, and all levels of government should recognise the tax they already receive, which will increase with property values regardless of the existence of a specific ‘value capture’ method.