Housing affordability in the ACT was dealt a savage blow when the ACT Budget was brought down yesterday, according to the Property Council of Australia.
Property Council ACT Executive Director, Catherine Carter, said the Budget unfairly targets the property sector, which is expected to fund an amount equalling almost half of the supposed 2006/07 surplus.
"Both the residential and commercial property sectors will have to bear the brunt of damaging costs built into a raft of new transaction fees, taxes and charges," Ms Carter said.
These include the introduction of a new Fire and Emergency Services levy, a new water fee, increases in several administrative fees and charges, a new charge on utilities using ACT land (the Utility Land Use Permit charge), and an additional six per cent increase in rates in the next financial year.
"The Government has a great opportunity to get the policy settings right in relation to issues such as housing affordability, taxation and infrastructure," Ms Carter said.
"But this Budget will not deliver the prosperity the Government has promised or do anything to achieve the Government's stated aim of making Canberra the most small business friendly jurisdiction in Australia. This Budget also weakens the ability of the Government to promote population growth.
"Canberra must achieve a critical mass of people to support amenities and services and to ensure we can afford to retain a world-class health and education system. Population growth is one of the key drivers necessary to drive economic activity and diversity of employment opportunity. Our objective is to see Canberra's population grow to 500,000 people by 2030 - an objective previously welcomed and endorsed by the ACT Government.
"In this Budget the Government has been forced to take some difficult decisions to rein in expenditure and we applaud them for that, particularly their efforts to restructure the public sector. We also commend the Government for its initiatives to complete the planning reform process, and to undertake some preliminary work in relation to development in the Molonglo Valley. These are all welcome initiatives.
"But these new costs however do nothing to stimulate business confidence or population growth in the ACT, and will have a direct and deleterious effect on housing affordability," Ms Carter said.
Ms Carter said the ACT property sector contributes approximately 50 per cent of taxation revenue through stamp duties, land tax, rates and Change of Use Charge.
"Property seems to be an easy target for taxation revenue in the ACT, as seen by the increases in stamp duty in previous Budgets and the introduction of Change of Use Charging to multi-unit developments," she said.
"This is a 'catch all' Budget in that it catches everyone - and the property sector, both residential and commercial will bear the brunt."
For more information please contact:
Catherine Carter, Executive Director, 02 6248 6902 or 0412 330 079