A Budget that contrasts supply with demand

The Property Council of Australia has described the State Budget as a budget that contrasts supply with demand at a time when South Australia needs more investment and stronger growth.

SA Executive Director of the Property Council Daniel Gannon said the State Government has adopted several key Property Council policy initiatives.

“The message coming out of this Budget is mixed – it’s about positive new spending but also punitive new taxes,” said Mr Gannon.

“While there are positive new housing supply initiatives, there are also punitive new taxes that don’t help to build an attractive investment environment.”

 

HOUSING SUPPLY LEVERS

“Pulling these supply levers will stimulate the property sector and those who work within it, but we do need to see a strategic policy focus on driving demand at the same time.

“Extending stamp duty concessions for off-the-plan apartments, providing a five-year land tax exemption for off-the-plan apartment investors, and pre-construction grants are unashamedly good news stories.

“Budget stimulus measures like these are strongly welcomed by developers, investors and particularly first home buyers at a time when affordability is becoming out of reach.

 

FOREIGN INVESTMENT

“This announcement means that South Australia joins New South Wales, Queensland, Victoria and Western Australia in imposing surcharges on foreign investment.

“Slapping counter-productive taxes on foreign investment is a great big risk for housing supply in our major capital cities, and South Australia now joins the flock.

“What we’ve seeing in other states is a race to the bottom on populist taxes that fail to address housing supply or improve affordability. In fact, just last year the Treasurer described taxes on foreign investors as “appalling” and “xenophobic.”

“The message to global investors is now less clear than it was before this year’s Budget despite commercial stamp duty abolition presenting a distinct advantage.”

 

COMPANY HEADQUARTERS’ TASKFORCE

“The South Australian economy has suffered in recent years due to the withdrawal of headquartered companies that have taken their large workforces and office tenancies to the eastern states,” he said.

“However, in an age of technology when the physical placement of a business is no longer key to its success, South Australia does have some competitive advantages to offer large multinationals.

“More companies taking up more commercial office space would lead to an instant boost in the CBD economy and population, and would drive the commercial office property market.

“The provision of $250,000 for the establishment of a Company Headquarters’ Taskforce is positive news and a green light for paving potential pathways back to Adelaide.”

 

ECONOMIC SIGNIFICANCE OF THE PROPERTY SECTOR

Please see below statistics about the importance of property to the South Australian economy:

  • Property is South Australia’s largest private sector employer and biggest industry
  • It accounts for 10.8% of the state’s economic activity (or $10.5 billion)
  • It builds prosperity by paying $4.4 billion in wages and salaries – one in six people draw their wage directly or indirectly from property
  • One million South Australians have a stake in property through their super funds
  • Property is the largest single industry contributor paying 56.6% of state taxes, local government rates, fees and charges

 

Media contact: Daniel Gannon | E dgannon@propertycouncil.com.au