A combination of fresh thinking and tried-and-tested ideas are at the heart of the Property Council’s bold reform agenda as we reset and reopen Australia’s economy.
Incentives for new housing construction, tax reform, housing affordability and migration are among the key areas for action as part of the Property Council’s seven-point plan for economic recovery after COVID-19.
“Some big and bold thinking is required to get the Australian economy going again after the impact of the COVID-19 pandemic,” says Property Council chief executive Ken Morrison.
The comprehensive seven-point plan outlines strategies to stimulate construction, grow skills, attract investment and boost confidence across the property industry.
1. Kick-start housing construction
Housing construction is a powerful economic multiplier; every $1 of residential construction generates $3 activity across the broader economy.
The Property Council’s plan proposes three strategies to kick-start this economic multiplier: a $50,000 ‘New Home Boost’ grant; additional assistance from states and territories, such as new housing stamp duty relief; and for the National Housing Finance and Investment Corporation to revisit some requirements to unlock the $1 billion housing infrastructure facility.
2. Accelerate growth with catalyst projects
The plan outlines eight strategies – from unlocking surplus government land to fast-track planning and incentives for building upgrades – that can kickstart property and infrastructure projects with the greatest potential to catalyse economic growth.
3. Reset the housing affordability equation
Government taxes and charges account for 25 per cent of the cost of a new home, while planning systems are under-resourced and prone to unnecessary delay. The Property Council’s six strategies include incentives to reduce costs in the production of new housing, accelerate investment in retirement living and build-to-rent housing, as well as new incentives to help the private sector create affordable housing for key workers.
4. Drive productivity through tax settings
Stamp duty costs the economy 72 cents for every $1 of revenue it raises, while company tax costs 50 cents in the dollar. The Property Council proposes a broad-based tax reform agenda to drive productivity and economic growth.
5. Harness capital to support recovery
Australia is heavily reliant on wholesale capital – both locally and internationally – to create housing and commercial real estate. The Property Council calls for consistent messages from all governments to “make it clear that Australia is open for business and investment”, alongside the removal of hurdles to Foreign Investment Review Board approvals and counterproductive foreign tax surcharges.
6. A resilient and forward-looking Australia
Australia can incorporate lessons from the pandemic period to deepen current economic strengths, foster new areas of competitive advantage and increase resilience in the economy and our communities. The Productivity Commission’s recommendations from the 2017 Shifting the Dial report around future skills, work, energy, innovation and regulatory reform can form a basis for priorities.
7. A ‘Welcome to Australia’ migration plan
Australia’s population was forecast to grow by 1.7 per cent per annum over 2020 and 2021 – but it will now most certainly shrink, creating an enormous economic drag.
The Property Council advocates secure testing, isolation and arrangements for international arrivals and a major international advertising campaign to promote Australia as a safe and healthy destination. A migration plan should also target temporary Visa classes that can make an immediate and positive impact on economic growth and incentivise permanent skilled migration.
“Property is Australia’s biggest employer, contributing more than 13 per cent of GDP and employing 1.4 million people. Our industry can be a powerhouse behind economic recovery and growth – but we need the right policy settings and market incentives from the federal, state and territory governments,” Morrison concludes.
About the author
The Property Council of Australia – https://www.propertycouncil.com.au/