21 June 2016
The NSW Budget contains significant expenditure on infrastructure including public transport that will underpin future urban development, says the Urban Taskforce.
“The 2016-17 NSW Budget includes $10.5 billion for public transport as part of a 4 year investment in infrastructure of $73.3 billion,” says Urban Taskforce CEO, Chris Johnson. “This enormous commitment to infrastructure will underpin the future development of more urban densities across the state but particularly in the Sydney metropolitan area.”
“This year’s budget includes $2.7 billion for the Sydney Metro composed of $1.4bn for the North West section and $1.4 billion for the South West line.”
“Unfortunately, a 4% levy on Stamp Duty for foreign investors is included and the Urban Taskforce believes this will slow down investment in new housing in NSW. The claim that this will add $1 billion to the NSW budget over 4 years assumes the levy will not deter foreign investors from investing in the NSW market, which is unlikely as 4% is quite a substantial increase”
“The budget papers give the following prediction about the housing market in NSW: ‘While the current housing cycle is longer than previous cycles, historically low interest rates, strong population growth and continuing supply limitations are expected to support activity.’”
“The Urban Taskforce is concerned that the combination of the stamp duty levy, the tightening of bank loans and uncertainty created by any rumours of the introduction of value capture levies may in combination lessen confidence in the new housing market and shorten the positive housing cycle.”
“The establishment of the Commissioning and Contestability Unit to optimise the delivery of services is a good initiative. The Urban Taskforce supports the key principle of the unit that ‘The market should provide services where it can achieve better outcomes and value for money for the people of NSW.’”
“The Commissioning and Contestability Unit may become more important in future years according to the Intergenerational Report (IRG) released with the Budget. The IRG indicates a fiscal gap of $17 billion between income and expenditure in 40 years’ time and suggests that more services will need to be outsourced and more Private Public Partnerships undertaken.”
“The allocation of $262 million from the Housing Acceleration Fund to support infrastructure in South West and West Sydney will help increase the capacity for urban development in these areas.”
“In the planning portfolio $20 million has been allocated to continue work on the online Planning Portal, $17 million to the Greater Sydney Commission (with $41 million over 4 years), $8.5 million for the Planning Assessment Commission and the Joint Regional Planning Panels and $7.2 million for the preparation of the next Greater Sydney Regional Plan and District Plans.”
“A strange figure in Budget Estimate No 3 seems to indicate the Department of Planning staff will increase by 223 people in 2016-17 which adds 50% to the current staff numbers. Given that a large part of their functions have been taken over by the Greater Sydney Commission, it seems odd that they will require more staff to do less work.”
“Overall the NSW Budget demonstrates that the state finances are in good shape and much of this comes from the buoyant property market and the transaction taxes related to this.”
