Housing industry slams Budget

Housing industry slams Budget

Posted on Wednesday, May 15 2013 at 11:06 AM

First homebuyers and the construction sector have been largely ignored in Wayne Swan’s latest Federal Budget, according to lobby groups.

In handing down his fiscal plan for the
year ahead, the Federal Treasurer outlined the government’s long-term social
policy vision for Australia. It includes significant funds for education
reform, Disability Care, a major ‘nation building’ infrastructure plan,
employment services and specialist healthcare.

However, housing largely missed out, which
the Real Estate Institute of Australia described as a missed opportunity.

The body’s president Peter Bushby says the
government “has ignored the plight of many young Australians” by not addressing
housing affordability and the difficulties many face with getting into their
first homes.

Numbers of first homebuyers have plummeted
in recent years. In May 2009, one-third of all purchasers were first-timers,
but the figure from March this year was just 14 per cent, he says. That’s well
below the long-term running average of 20 per cent.

The Housing Industry Association was
equally unimpressed with the Budget. The lobby group’s chief economist Harley
Dale says more needs to be done to boost the ailing industry and increase
housing supply.

“It’s disappointing there are no measures
to address the excessive regulatory and taxation environment faced by
Australia’s residential building industry,” Dale says. “Such reform and
investment measures would generate a healthy economic dividend to the entire
economy, including a substantial boost to government revenue.”

Dale says continued funding for the
existing National Rental Affordability Scheme is welcome.

The REIA praised the allocation of $112
million in new funding for a trial program to support age pensioners who want
to downsize their homes. Under the initiative, eligible seniors who’ve lived in
their own home for at least 25 years and want to move on will receive special
tax concessions.

“(They would) need to put a minimum of 80
per cent of the excess sale proceeds from the sale of their former home into a
special account,” Bushby explains.

Those funds wouldn’t be taken into
consideration under the pension income and assets test for up to 10 years or
until a withdrawal is made from the account.

As well as benefiting age pensioners
financially, the trial program could lead to a “better utilisation of existing
housing stock”, he believes.

The Retirement Living Council welcomed the
pilot project but described the eligibility requirements as “overly onerous”
and not reflective of the needs or circumstances of most aged pensioners.

In other property-related Budget news,
investors who utilise trust structures should ensure their affairs are in order
and above board, with additional funds allocated to the Australian Taxation
Office (ATO) for compliance and enforcement.

The ATO will increase its capacity to
detect tax evasion by trusts by double-checking the information it receives
with third parties. This extra awareness is expected to rake in an additional
$379 million over four years.

Foreign investors with high-end properties
will be subject to a new 10 per cent withholding tax to apply to the sale of
dwellings worth more than $2.5 million.

One area in which the government didn’t
skimp is infrastructure investment. The Budget details $3 billion in new
funding towards a total $24 billion program to boost the “next wave of nation

It includes an injection of funds for the
Motorways Program in Sydney, including the M4 and M5 extensions, the Metro underground
railway in Melbourne, and the Cross River Rail project in Brisbane, to name
just a few.

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