Federal Budget 2018: Impact on the property industry

Federal Budget 2018: Impact on the property industry

The Federal Government rolled out its re-election budget this week with a big focus on tax relief, massive infrastructure and business investment. The increase in infrastructure will have positive implications for the property industry — Australia’s biggest employer.

An extra $24.5 billion worth of transport improvements was rolled out as part of the government’s $75 billion ten-year infrastructure plan.

Here’s a breakdown of some of the major projects underway, summarised by Business Insider:

federal budget 2018 business insider

Source: Business Insider

 

National projects

$9.3 billion Melbourne to Brisbane Inland Rail

NSW

Up to $5.3 billion Western Sydney Airport
$1.5 billion of funding and a $2 billion concessional loan for the WestConnex project in Sydney
$2.9 billion Western Sydney Infrastructure Plan

VIC

$500 million M80 Ring Road
$500 million Monash Freeway Upgrade

QLD

$6.7 billion Bruce Highway

WA

$1.3 billion METRONET, including $490 million for the Forrestfield Airport Link

SA

$1.6 billion Adelaide North-South Corridor

TAS

$400 million Midland Highway

ACT

$67 million for Capital Metro under the Asset Recycling Initiative

NT

$192 million for the Northern Australia Roads Program

According to the budget papers, for every dollar the federal government invests on infrastructure a return of $4 will be delivered to the economy.

“The government has a role to provide infrastructure where it leads to net benefits for businesses and communities and where there are barriers that prevent individuals or businesses from investing themselves,” the budget papers said.

“Public investment, well targeted and efficiently delivered, supports productivity.”

The Property Council has heralded the big infrastructure boost confirmed in the Federal Budget but called for this to be leveraged into a stronger plan to create great cities and support a growing Australia.

“The budget goes long on infrastructure and overwhelmingly funds the right projects. Now these need to be leveraged into comprehensive plans to grow our cities and regions,” said Ken Morrison, Chief Executive of the Property Council of Australia.

“The Government’s ten-year infrastructure pipeline will reduce congestion, boost productivity and improve connectivity in our cities and regions. For the most part, these are projects which are on the Infrastructure Australia priority list.

“However, we need to go further. This funding needs to be leveraged into growth plans for our cities in partnership with the states and territories.

“Our cities are growing fast and we should be much more ambitious in our approach to planning for the future growth of great Australian cities.

“The funding for infrastructure is vital, but it also means getting the planning right and tackling the regulatory issues which affect the productivity and livability of our communities,” Mr Morrison said.

The government had little to say on housing affordability, tax incentives for the build to rent market or a rental affordability scheme.

“The Budget is silent on support for the ‘build to rent’ sector which has the potential to make an important contribution to improving housing affordability in Australia,” Mr Morrison said.

National Shelter executive officer Adrian Pisarski said that despite a commitment to remote housing in the Northern Territory, the budget was mostly silent on affordable housing, reported The Urban Developer,

“This was the government’s chance to build on the good initiatives of 2017 by adding a capital component, looking at how to use build to rent, creating new incentives to get states and the private sector to do more, instead there is very little to help people struggling to meet their housing costs.

“There was no boost to Commonwealth Rent Assistance to alleviate the crippling rent paid by the lowest income households, no new supply strategy, no tax reform to end the distortions and rebalance the market, nothing to help Gens X and onwards get into the market, it’s very disappointing.”