With the mining sector falling both as a proportion of Australia's GDP as well as a share of federal revenue, the property and construction sectors are poised to make up the shortfall.
While the Federal Budget forecasted an estimated 25% drop in mining investment for next year, GDP is still predicted to grow from 2.5% this financial year to 3.5% in 2017/18.
The Treasury believes that household spending will grow to as much as 3% next year with employment remaining steady, in part due to the new spending on small business and workforce programs. However, the real shift will come as the focus turns from mining to non-mining sectors, with mining's share of economic growth predicted to fall from 45% (over the last 3 years) to 16% (over the next 3 years).
The Property Council of Australia believe this shift will require more policies favouring continued growth in the property and construction industries if we want it to be successful.
The Australian Housing Industry Association said the budget's small business package had delivered a welcome injection into what they believe is a core sector of Australia's economy - the small business industry.
Housing Industry Association (HIA) Chief Executive, Industry Policy and Media Relations, Graham Wolfe said, "The $5.5 billion 'Growing jobs and small business package' provides important support to a wide-ranging group of small businesses in the residential construction industry."[urbanRelatedPost][/urbanRelatedPost]"The combination of a small business company tax cut of 1.5%, a 5% cut to incorporated small business profits up to $1,000 per year, and the accelerated depreciation allowance on all new assets up to $20,000 provides a positive impetus for the Australian economy.""In particular, the immediate deduction available on the acquisition of new assets is a policy announcement welcomed by the residential construction industry," he said.
While pleased with the small business package, he does believe more focus needs to go into skills and training.
"There needs to be a greater focus on skills and training to nurture and develop the skilled labour force required to house Australia's growing and ageing population."The Budget did however confirm the new taxes to be levied on foreign purchasers of Australian property, as well as higher penalties for breaches and the introduction of a foreign land register.
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The new taxes will raise $735 million in revenue over four years, exceeding the administrative and compliance costs.
The Property Council of Australia were pleased to see the Government had eliminated the GST reverse charge for going concern sales, which would have resulted in hiked-up stamp duty on transactions.
"This decision restores certainty for investors and ensures that when commercial investments are sold as going concerns, these remain GST-free but do not trigger big new stamp duty liabilities."To read more about the 2015 Australian Federal Budget click here.