Election game changers

Our next federal government needs to frack through the crusted seams of business and consumer gloom to release the natural optimism and animal spirits of Australians.

Here’s a few of the Property Council’s game-changing proposals.

One: Commit to a new deal for Australian Cities – boost urban productivity. Australia can secure its prosperity by growing its population, boosting productivity and lifting job participation rates – the three Ps.

Progress on the three Ps isn’t possible unless we fix our cities, which account for 82 per cent of the nation’s GDP and 80 per cent of the population.

We need to:

  • Place cities at the heart of a national productivity and liveability agenda, led by a ministerial champion
  • Develop far-sighted plans for cities, with 30-year infrastructure roll-out programs and certainty around development rules
  • Modernise the governance of cities and local government
  • Provide incentives for smart urban planning by linking federal government funding to state and local government performance.

Two: Establish urban infrastructure bonds. Australia can help meet its infrastructure funding needs by tapping into the world’s pool of patient capital and the nation’s $1.5 trillion of superannuation savings.

Australia should launch an infrastructure bank that seeds an urban infrastructure investment asset class, by:

  • Identifying priority productivity-boosting infrastructure – not just big kit, but assets that reduce local transport pinch-points and fund community facilities
  • Providing a tax credit for investing in infrastructure bank bonds.

Three: Increase housing supply with a national housing partnership.

Housing construction is at record lows. We need a national effort to lift housing affordability and choice.

This requires a new era of collaboration between Australia’s nine governments, led by the federal government, which should:

  • Negotiate a COAG-agreed National Housing Partnership (NHP) that includes private housing supply targets, which are reflected in all metro planning strategies, along with an incentive and penalty system tied to achieving these targets
  • Appoint a Minister responsible for delivering the NHP agreement
  • Revitalise the National Affordable Housing Agreement (NAHA) so that federal payments to states and territories are tied to achieving specific social housing targets
  • Expand the National Rental Affordability Scheme (NRAS), which should also seed fund innovative financing pilot schemes and housing for seniors
  • Identify commonwealth land and existing assets that can be transferred to community housing providers partnering with the private sector
  • Develop a housing strategy for seniors.

Four: Get serious about tax reform as a productivity booster. The Henry Tax Review formula is simple: trade in dozens of out-moded, inefficient taxes for those that are broad-based, low rate and efficient.

To succeed, this process requires an ironclad commitment from all states and territories. Australia’s next federal government should:

  • Establish a Tax Modernisation Commission to prepare a blueprint for replacing inefficient taxes with productivity-boosting alternatives
  • Reduce withholding tax to 10 per cent and maintain current thin cap rules
  • Implement the Property Council’s 9-point program for streamlining the operation of the GST
  • Maintain existing negative-gearing and CGT concession rules.

Five: Introduce green incentives for older buildings and champion resilience. The smartest path to meeting Australia’s environmental objectives is tune-up and retrofit the nation’s building stock.

The next federal government should:

  • Introduce a simple grant program for upgrading existing buildings to verifiable green performance standards
  • Cut the swathes of duplicative reporting green tape
  • Safeguard Australia’s $6 trillion of property risk by implementing ASBEC’s 10-point resilience framework for the built environment.

The looming federal election should unleash a contest of ideas.