17 March 2009
The decision by the Federal Opposition to oppose legislation establishing the Australian Business Investment Partnership was irresponsible and risked damaging the national economy, according to the Urban Taskforce.
The banks have been denying developers credit left, right and centre even for very low risk development projects, Mr Gadiel said.
There is a real risk that the major banks will not be able to take the place of a foreign lender exiting a syndicate.
The Opposition appears to be unaware of the massive impact the withdrawal of credit from the banks has already had on urban development approvals.
Approvals for new apartments and town houses fell by 15 per cent in January alone in seasonally adjusted terms.
Many developers are telling us that within six months they will have no major residential development projects under construction.
Mr Gadiel said that foreign banks account for a quarter of the commercial property exposures in Australia. Many of these banks are now owned by foreign governments, he said.
The Australian Business Investment Partnership is crucial insurance policy to safeguard the economy.
The absence of alternative credit may force distressed asset sales.
This could artificially depress commercial property prices.”
Mr Gadiel said the economy will pay a heavy price if this legislation is blocked.
Without this legislation we may see a further reduction in confidence, a deeper economic downturn and a postponed economic recovery.
Mr Gadiel said that Australia will need the property development and construction sector to lead it out of the current economic slowdown.
For every $1 million in construction expenditure, 27 jobs are created throughout the broader economy, he said.
The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.
