JobKeeper, tax reform key for property prosperity: REIA
Real estate industry groups are ramping up pressure on the federal government to provide more support for the property sector, to avoid job losses and ensure it can continue to contribute to the country’s economic growth.
A new survey conducted by the Real Estate Institute of Australia identified nine items that the property industry was urging the government to consider to minimise the economic impacts of the COVID-19 crisis.
The survey was conducted following a request by Treasury’s Coronavirus Business Liaison unit, which requested details on measures that could support the real estate industry.
The nine matters for consideration are:
- Extension of JobKeeper for some sectors including real estate agents
- Extension of JobSeeker for some sectors
- Abolish or at least a at least a temporary cessation of stamp duties on residential property
- Abolish or at least a temporary cessation of payroll tax
- Abolition or at least temporary concessions on land Tax
- Assistance for renters in vulnerable industry sectors.
- First Home Buyer Assistance
- Support for regional areas through infrastructure investment and support for businesses locating to regional areas
- Review the lower limit for HomeBuilder eligibility.
REIA president Adrian Kelly said the focus of the measures was to recognise that property is a main driver of economic growth and a key factor in industry diversification.
Research by AEC Group, commissioned by the Property Council of Australia, shows property is Australia’s biggest employer, with 1.4 million people working in the sector.
The research also showed the property industry contributes 13 per cent of the country’s GDP, equating to more than $200 billion of economic activity.
“A healthy property sector has been a crucial support to economic growth over the previous three years,” Mr Kelly said.
“It stands to reason then, that in these unprecedented times, that government would consider a stimulus to the sector to boost expected low levels of employment and address growth in the Australian economy.”
The Property Council is also lobbying for more federal support, focusing on the fast-tracking of approvals for major projects.
Prime Minister Scott Morrison this week announced measures to speed up major infrastructure works, comprising 15 projects that will be given fast-tracked approvals.
An additional $1.5 billion will be provided for smaller infrastructure projects, Mr Morrison said.
Coining the initiative JobMaker, the Prime Minister said the government was aiming to cut approval times for infrastructure works by 25 per cent by the end of the year, to a maximum of 30 days.
Projects that will be fast-tracked include an inland rail line from Melbourne to Brisbane, the Marinus Link between Tasmania and Victoria, an extension of Olympic Dam in South Australia, water projects in NSW and road, rail and iron ore projects in Western Australia.
Property Council of Australia chief executive Ken Morrison welcomed the commitment, but said it was not just “blockbuster projects” that needed to be freed up from unnecessary red tape.
“Modelling done for the Property Council shows the economy could get a $3 billion annual boost just through more efficient planning approvals processes,” Ken Morrison said.
“There are residential and commercial projects in every town and city which are subjected to lengthy planning approvals and referrals across different agencies.
“Better coordination of the process across different levels of government and between agencies doesn’t mean taking short cuts or not doing the job properly, it’s just common sense.”
Meanwhile, the Real Estate Institute of Victoria is putting the heat on its state government, requesting urgent changes to processes governing land tax relief for commercial landlords affected by COVID-19.
REIV president Leah Calnan said the current process greatly disadvantaged property owners who have negotiated rent relief for tenants in good faith.
“Currently, once commercial rent relief negotiations are completed, the tenant must complete an online form to enable the landlord to apply for land tax relief. Only the tenant can complete this form for the landlord”. Ms Calnan said.
“Our primary concern is that there are no incentives or consequences for the tenant if they fail or refuse to do this.
“The commercial property owner is at the mercy of their tenant to apply for the tax relief promised by the government.”
Ms Calnan said it was crucial that all affected parties be supported through the crisis, with the majority of landlords mum and dad investors doing their best to support tenants.