A popular GFC tagline was that the financial crisis was “too good to waste”.
Australia navigated the downturn better than most; but, did we as a nation take the opportunity to position ourselves for a new era of high productivity prosperity, or did we squib it?
The optimistic school will say that structural change – the big, game-changing stuff – is a long journey.
The good news, they say, is we lit the fuse. There are no big bangs or quantum leaps. When it comes to cities and infrastructure investment, tax reform, financial and funds management regimes or red tape slashing, we’re cannily building the platform that will ace our global competitors (in time).
The skeptics will grumble that you don’t float the dollar one decimal point at a time; that our game-changing successes of the past, the big micro economic reform and competition policy agendas, were gutsy high profile contractual promises by governments, working with business and the community.
The critics don’t see their equivalent in the slews of consultant reports and 40-page COAG communiqués.
In short, they say, the problem isn’t the financial deficit, but a deficit of policy bravery and courageous ideas.
The balanced view is we need more energy injected into the big policy projects. Here are the Property Council game-changers for 2010.
Property tax cuts via the Henry Tax Review
Opportunities – eliminate all stamp duties, developer charge rip-offs and dopey levies by instituting a very broad-based, flat rate property tax. In short, you pay less tax and suffer less compliance hassle. We can also fix the quagmire of legacy tax issues (particularly the GST rules).
Threats – Henry could propose property owners pay for everyone else’s tax cuts (because property taxes are “less mobile”), and nix negative gearing and sensible CGT concessions.
The skinny – 2010 will decide the rules for determining your property tax bills for the next generation.
World class managed investment rules
Opportunities – a simpler, world-beating regime for listed and unlisted property vehicles, including the axing of archaic active/passive rules, greater flexibility over distribution levels and lower taxes on distributions. We can also attract more than three percent of the world’s savings.
Threats – greater bias toward companies over trusts, greater complexity.
The skinny – there’s an appetite for change, but we’ll need bipartisan support to get the new regime through the Senate.
Growth plans for our cities and regions
Opportunities – 30+ year smart planning strategies for all our cities with scheduled (and funded) infrastructure roll-out programs that service growth. We can also crank up the housing supply needed to improve affordability.
Threats – a new era of anti-growth zealotry gains the whip hand.
The skinny - the PM (Kevin “I like a Big Australia” Rudd) is our industry’s champion on this one. Politically, it doesn’t get better than this. 2010 provides our best chance to plan for growth and demonstrate its virtues to the community.
Supercharge the greening of buildings, precincts and cities
Opportunities – secure accelerated depreciation incentives to upgrade 330 million sqm of ageing non-residential stock, plus a bigger, more comprehensive Green Building Fund and tradeable energy efficiency certificates for smart property managers.
Threats – a new tax system that penalises property owners who don’t meet totally theoretical energy/carbon performance levels in addition to a dozen other measures that don’t join up.
The skinny – an even bigger strategic opportunity is to turn our urban precincts into their own power stations, water harvesters and electric car battery packs. Lots of ground work is required in 2010.
Faster, depoliticised development assessment
Opportunities – professionalise develop-ment assessment by transferring decision-making from politicised councils to independent expert panels working from very clear rules; plus, more ‘as of right’ development.
Threats – opposition parties playing the populist card and winding back gains already made.
The skinny – we’ve already made huge progress in several states. We need to close the deal in 2010.
Deeper, more liquid debt markets
Opportunities – diversify sources of debt and reduce our sector’s reliance on the big banks, starting with the re-booting of the CMBS market.
Threats – the charmed existence of the big four banks.
The skinny – some of our best friends are banks, but their interests don’t always align with ours. We need to engage better with the banking community, but also spur competition by encouraging new players (insurance and super funds) into the game.
One set of property rules for Australia
Opportunities – the holy grail of a common platform of property-related laws in ALL nine Australian jurisdictions.
Threats – the blame game and parochialism that typifies the Australian Federation.
Comments – OK, this will take a few years, but the OH&S rule changes show that common sense can prevail.
Of course, there’s plenty more on the agenda. Plus, there’s our industry’s own leadership programs that aim to craft a more informed, professional and respected property industry.
Bottom line: 2010 is the year for game-changing policy bravery.
