Arrium sale reveals mixed foreign investment message

The State Government today welcomed the sale of the Arrium steelworks to an overseas buyer, but at the same time is signaling an appalling mixed message on foreign investment.

Only last week the State Government followed New South Wales, Queensland, Victoria and Western Australia in imposing taxes on foreign purchasers of residential property.

SA Executive Director of the Property Council Daniel Gannon said the State Government was sending mixed messages on foreign investment.

“The State Government has to work out which message it wants to send to foreign investors: South Australia is either open to foreign investment or closed,” he said.

“Last year the Treasurer described taxes on foreign investors as ‘appalling’ and ‘xenophobic,’ but fast forward 12 months and the landscape has changed.” The Treasurer went further last week, declaring:

“If we don't charge the surcharge but they're charging it in every other jurisdiction … what you'll see is that foreign investment flood into our residential properties.”

“The local residential property market is not over-heating and does not suffer from high levels of foreign investment. In fact, we should do everything we can to welcome more investment, not less.

“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 seen in other states is a race to the bottom on populist taxes that fail to address housing supply or improve affordability.

“While the Government is right to welcome “a great victory for Whyalla and an extraordinary victory for South Australia” through the Arrium news, they are wrong to push foreign investors away from our residential market.”

 

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