14 August 2013 — The 2013-14 WA state budget, delivered on 8 August, lacked long-term tax reforms and was old fashioned, the Property Council of Australia has said.
Tax reforms were needed to deal with the state’s tight finances and connect with public policy initiatives around the aging population and housing densification, a PCA media statement said.
This included help for ageing households to downsize from larger to smaller homes through the transfer duty system and support for key state planning policies including greater housing densification in Perth’s inner suburbs.
The Barnett Government expects to post a surplus of $386 million over the 2013/14 financial year, with debt predicted to rise to $22 billion. By the 2016/17 financial year, debt is expected to blow-out to $28.4 billion.
Treasurer Troy Buswell was frank on the issue of debt: “make no mistake, we have a problem with debt”, he said in a report on the ABC website.
The PCA also said: “The sharp rise in land tax rates as very disappointing and a sign the State Government has no appetite for genuine tax reform to boost long-term economic productivity and safeguard retirement savings invested in property”.
The PCA said the state government had reverted “to the old-fashioned way of balancing the books through property tax increases rather than engage with the public on meaningful tax reform”.
“The sharp increases in taxes overshadowed the positive initiatives in the budget, including redirecting the First Home Owners Grant to new housing and making financial commitments to go ahead with major infrastructure projects promised at the election”.
This included about $6 billion of road and rail projects in Perth to deal with Perth’s congestion problem.
“This will boost the state’s productivity,” the PCA said. “However the land tax slug will make WA less productive by worsening the State’s other major problem – declining affordability in housing and across the economy.”
The PCA’s key takeouts for the property sector were:
- Land tax rates up 12.5 per cent across the board
- Perth Parking Levy increases between 5 per cent to 10.5 per cent
- Total WA property taxes up 15 per cent to $3.3 billion
- No commitment to tax reform
- Record high infrastructure spending (but it peaks in 2013-14)
- Sharp increase in debt funding for productive infrastructure
- Commitments to new road and public transport transformational projects in Perth
- More first home buyer money for new housing
- More funding for social housing
- Budget measures to bring forward Government planning approvals reforms
- Construction and investment boom in resources sector has peaked and halves by 2017
- Construction of new homes expected to increase strongly
- Declines in both state economic growth and population growth expected