11 November 2008
Todays mini-budget doesnt do enough to pull NSW out of its downward economic spiral, according to the Urban Taskforce.
NSW has always been reliant on property development to pull it out of economic slowdowns, Mr Gadiel said.
But its not enough for the government to cross its fingers and hope that urban development will just happen.
NSW development activity is in rapid decline and urgent government action should have been a centrepiece of todays mini-budget.
While construction activity is low everywhere, NSW has been particularly hard hit.
In September 2008 seasonally adjusted NSW home approvals fell by 26 per cent, compared with a fall of 4 per cent fall in Victoria. Queensland home approvals actually increased by 3 per cent.
Weve just seen the lowest NSW monthly home approvals in the entire history of Australian Bureau of Statistics record-keeping.
This fact alone should have been enough to prompt the state government to announce a major economic stimulus measure for the development sector.
We note the Treasurer has promised an urgent review of state and local council infrastructure levies.
However this is will only be the latest in a series of reviews carried out by the NSW government.
Its not clear why any further review is required. The NSW economy needs swift action todays mini-budget should have immediately waived state infrastructure levies and forced a reduction in local council levies.
Instead developments in Western Sydney will still face levies ranging from $70,000 to $90,000 a new home.
In the Hunter, developments still face the prospect of $251 million in new levies to fund the Tillegra dam.
Mr Gadiel said the limited benefits of the one-year $3,000 first home buyers grant would be offset by a permanent 25 per cent increase in tax on businesses holding land for development.
The government is hoping to reap an additional $170 million a year from owners of commercial, industrial and residential development properties.
The last thing that the government should be doing right now is increasing tax.
Our industry simply cant sustain yet another impost from government.
Mr Gadiel said that the situation in NSW is far more serious than any comparable state.
In the last six months NSW home approvals have fallen by 39 per cent, Mr Gadiel said.
In the same period Victorian approvals fell by 2 per cent and in Queensland they fell by 5 per cent.
Government reforms to the planning system will help make NSW a better place to invest.
But this wont be enough as long as massive infrastructure levies deprive NSW development projects of any chance of succeeding.
The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.
