Victorian State Budget Recap
It will not come as a shock to anyone that stamp duty and land tax are a huge source of income for the government. The active market place is one that will continue to contribute to the States coffers, so it is pleasing to see a significant portion of this money being reinvested into key infrastructure as part of the Victorian State Budget 2018/19.
The Urban Development Institute of Australia (UDIA) reported that the recent Labor Government budget tells us that approximately 47% of Victoria’s tax income is derived from property, making it the most fundamental plank of our economic future. There’s no doubt that property will play a huge role in funding the evolution and improvement of our communities, our cities and our regional areas through the raft of major investments announced in the state budget, which includes record investment in infrastructure for our newest and fastest growing communities.
One thing that cannot be ignored is the absence of meaningful funding towards increasing housing supply. This will continue to keep the ledger swaying to the demand side, this will maintain strength and continue to influence growth in current house pricing.
The one area to enjoy some promised funding is within the planning process, which includes $14.7 million to slash red tape by putting an end to protracted permit applications for simple projects, $9.7million to process more planning permits, and $3.5 million to help councils do faster subdivision approvals.
As reported by the UDIA the following are some of the key changes affecting Victoria’s urban development industry;
– Taxes on property now represents approximately 47% of the State Governments Tax revenue and 16% of its total revenue.
– Employment growth will strengthen with the unemployment rate forecast to remain at 5.75% and drop to 5.5% in forward estimates.
– Population is growing at a rate of 2.3% a year, the strongest growth rate in the nation. Population growth, coupled with no clear strategy to increase new housing, will continue to place pressure on housing supply thus leading to stronger house prices.
– Stamp duty revenue is expected to increase by 3.8% this year
– Land tax revenue is expected to increase by 23% to approximately $3.1 billion following from a $2.5 billion revenue from the previous year. the expected $259million per annum increase reflects the strength of the property market.
– $50million to kick start work for a high-speed rail link between Geelong and Melbourne, with planning to determine a preferred set of options.
– $1.3billion for schools, including $180.8million to build, plan and upgrade 60 regional schools.
If you are looking for ongoing confidence in the current and future market place; a drop in unemployment; population growth; investment in a high-speed rail link; international terminal at Avalon Airport; plus further investment in Schools and infrastructure, this should go a long way to giving you ongoing comfort and confidence in the Geelong economy.