The State Government faces some tough choices in this year’s State Budget according to the leading property industry body.
Victorian President of the Property Council Daniel Grollo says the State Government will have to start restraining spending and keep up the pace of tax reform if the state’s economy is to grow.
He says Victorian taxes need to be competitive with other States, and the State Government need only to look at NSW to see that Government’s public relations disaster caused by its increasingly greedy property tax slugs.
“We are very concerned about the recent NSW property tax rip offs. The Bracks Government should not see NSW’s problems as a chance to create new taxes here. The new ‘vendor tax’ and the land rich provisions in NSW are tax rip offs we should not learn from.
“The Government has to keep the momentum from the land tax and WorkCover cuts going, or all the hard work will be lost.”
Mr Grollo says in spending items, the Government needs to seriously reinvest in our existing infrastructure, and look for future opportunities to drive increased productivity efficient delivery of goods and services. He is concerned we are sitting on a potential spending time bomb with our ageing roads, pipes and wires.
“We need to consider the way funds are allocated. Using today’s tax dollars to pay for assets that last for decades is crazy. We should pay for assets over the life of the asset. And we have to start acting soon, or the cost will be horrendous.
“That means the State Government has to seriously reconsider the debt averse approach, and the way to do that is to issue specific purpose bonds.
“The current policy to use state tax windfalls generates higher taxes than needed and holds back economic activity.”
Mr Grollo says the Government has done some hard work on tax reform in the recent Economic Statement but there is a lot still to go.
“Insurance for example is overburdened with taxes. The government levies taxes on top of the taxes it has already imposed, which artificially inflates the tax collected.
“We think there are a few areas where savings can be made, for example the trading hours mess, is not a big spending item but it’s symptomatic of the government’s general resources intense approach. Sometimes less is more,” Mr Grollo said.
He says the Government has shown a commitment to environmentally sustainable buildings, and he would like to see it extend it to programs promoting better performing building plant and equipment.
“The Government should encourage business through grants to purchase ‘green plant’ when they carry out upgrades. It should continue funding for the Commercial Office Initiative through the SEAV, and it should drive increased growth of green power options.”
Mr Grollo says our planning system needs a lot of resources to cope with the reform demands.
“The Department of Sustainability and Environment needs the resources to attract sufficient talented staff to get the job done. And, it needs to help councils meet the demands of the planning system, and retain planning staff.
“Planning needs a higher profile in Government. It should consider separating the planning section within the DSE, and creating an Office for Urban Planning. This would help give it an improved community and industry profile. We think it is too hidden away at the moment.”
Mr Grollo says the work of government is immense, and the community has high expectations, but a hard working, strategic and visionary government can achieve the delicate balance in community needs.
For further comments contact:
Robert Bartlett, 0421 77 88 47 or 9664 4230