The New South Wales Premier and Treasurer have been urged to ensure the NSW's budget outcome for infrastructure spending matched the 'rhetoric' on the Government’s housing affordability plan.
“The NSW built environment is being transformed by the Berejiklian Government’s $73 billion infrastructure spend and future generations will benefit enormously from this investment,” Property Council NSW Executive Director Jane Fitzgerald said.
“But, in a budget that trumpets an upgraded surplus of $4.5 billion this year, $2.7 billion next – and solid surpluses in the out years – it is disappointing to find that half a billion dollars of new taxes could be imposed on the property industry to fund the extra infrastructure investment foreseen in the government’s housing affordability plan.”
Ms Fitzgerald said that for the first time, the budget papers revealed the Government expected to collect more than half a billion dollars from the property industry over the next four years to fund state infrastructure needed to support increasing housing supply.
The papers stated that the expansion of State Infrastructure Contribution Scheme (SICs) to 10 new areas announced in the recently released NSW Government housing affordability plan would raise an additional $545 million in revenue.
These additional costs were on top of the announcement as part of the Government’s housing affordability plan that the Local Infrastructure Growth Scheme would be closed in 2020 with a potentially significant cost shift to the property industry of almost $400 million.
Ms Fitzgerald said the budget suggested that significant additional costs could be imposed on the supply of the average home.
“The budget confirms that with an increase of 9.6 per cent in residential property stamp duty revenue in 2016/17, the rivers of gold flowing from property taxes will fund essential services and programs next year and beyond,” she said.
“By 2020 that could add a billion dollars to the cost of delivering new homes in NSW.
“Sydney’s housing supply pipeline ground to a halt less than a decade ago under the burden of excessive infrastructure taxes, so widening the net risks a repeat of recent history.”
Ms Fitzgerald said that the Government needed to take serious care to ensure that secondary policy decisions, such as the cost shifting the new SICs envisage, did not torpedo the primary policy objective of improving housing affordability in this state.
The budget papers also confirmed that wholly or majority owned companies who were positively contributing to housing supply in NSW would be exempt from the foreign investment taxes imposed in last year’s budget and that the exemption would be backdated to June last year.
“These were a direct tax on housing supply and the Premier and the Treasurer are to be congratulated for acknowledging and fixing this so quickly.”