WA hikes land tax, scales down first homebuyer grant
Posted on Friday, August 09 2013 at 9:55 AM
Property owners in Western Australia will be slammed with a 12.5 per cent hike in land taxes as the resource state grapples with soaring costs and flatteing revenue.
In a further bid to cut costs, it has become the final state
to gouge its first homebuyer grant for existing properties, although the
government refrained from scrapping it completely in yesterday’s Budget.
The current $7000 incentive for first-time purchasers of an
established dwelling will be cut back to $3000.
However the government will bump up the grant for anyone
buying a newly built or off-the-plan home, offering $10,000.
That tweak is one of a variety of cost-saving measures
outlined in the resource state’s 2013-14 fiscal blueprint, which forecasts 3.25
per cent economic growth in the next year.
That’s the fastest economy of all other states and
territories and dwarfs the national economy’s projected 2.5 per cent growth
rate.
Despite that, Treasurer Troy Buswell says WA faces a debt
issue and the next year’s expected surplus of $386 million could be the last
time the balance book is in the black. A deficit is on the cards for 2014-15,
the government concedes.
“An imbalance has emerged between growth in the state’s expenditure and
growth in revenue,” Buswell says. “This brings
significant financial challenges, as major resource projects transition from a
construction phase to a production phase, the demand for labour has begun to
ease, and so has growth in the State Government’s tax revenue.
“The challenges are exacerbated by WA’s declining share of GST revenue. It
has already fallen to a historic low of just 45 cents for every dollar of GST
raised here – that means WA loses $477 million in revenue.”
That pressure has forced the government to find $6.2 billion in savings
over the next four years, from spending cuts and revenue-raising measures to
public service redundancies.
One such cash grab includes a 12.5 per cent across-the-board increase to
land tax, which Buswell says will offset lower than expected land valuations.
Workers on 457 visas will have to pay $4000 per year to send their kids to
school, solar panel owners will get a lower feed-in tariff, public service wage
increases will be capped and authorities will re-prioritise infrastructure
spending.
Purse string tightening aside, the government will invest a staggering $4.5
billion of new money in infrastructure this year, bringing the total program
commitment to $27 billion over the next four years.
That includes funding the MAX light rail project, the airport rail link and
the Swan Valley bypass, more commonly referred to as the Perth to Darwin
Highway.
On roads, the government will invest $1.8 billion in improvements over the
next 12 months. Health services will receive a major boost with $1.1 billion
allocated to hospital rebuilding efforts, while $580 million will be spent on
school infrastructure.
“This State Budget reflects tough but necessary
decisions undertaken by the government to secure our economic future,” Buswell
says.
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