Budget fails to deliver

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Some sectors of the property industry have blasted the 2010/11 Federal Budget, saying that it fails to offer reasonable solutions for Australia’s housing shortage and unaffordability problems.

Housing Industry Association (HIA) managing director Shane Goodwin said that although the Budget offers a sensible plan for economic recovery and avoids pre-election big spending promises, it does little to address the above points. “Unfortunately, the Budget fails to deliver measures to alleviate Australia’s chronic housing shortage. The federal government’s own Housing Supply Council estimates Australia’s housing shortage at nearly 200,000 in 2010 and projects that shortage to double over the next 10 years,” he said.

“Australia’s housing pipeline remains clogged by exorbitant infrastructure costs, planning delays and slow land release. Until these bottlenecks are removed, many Australian families will remain locked out of home ownership as house prices and rents push ever-higher.”

Monique Sasson Wakelin, director of Wakelin Property Advisory, agreed that the Budget had failed in a few key areas. “This government has ignored any serious reform to aid struggling first homebuyers or redeploy the billions of dollars paid by Australians in property taxes which the economy largely depends on,” she said. “Stamp duties paid by homebuyers are, for instance, a major cause of our ongoing housing affordability problem, while land taxes paid by property owners are a key competitive disadvantage for Australian investors.” Wakelin added that a major overhaul of property tax was needed.

Commsec said that it disagreed with the government’s belief in a “no-frills, no-nonsense” Budget. “Australia was successful in avoiding recession last year and, unlike other advanced nations, isn’t weighed down by huge deficits and debits. We should be building on that success. Spending should be cut, not curbed, so that the Reserve Bank – and homebuyers – don’t have to shoulder the burden,” Craig James and Savanth Sebastian said in the Economic Insights report.

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