- WA is the only state or territory to have recorded a budget surplus for this year
- $875M social housing injection was previously announced
- Three major industry bodies have welcomed the budget, but also have concerns
Taking over the role of Treasurer after his landslide win at this year’s state election, WA Premier Mark McGowan released his first budget yesterday.
Thanks to the booming resources and property sectors, feeding in revenues to the Treasury coffers – and the fact WA has only endured three short lockdowns so far this year – the Treasurer/Premier brought down a $5.6 billion surplus.
This makes WA the only state or territory in the country with a surplus this year. By comparison, Victoria has a $17.5 billion deficit.
The surplus was also helped in part by a new arrangement surrounding GST revenue whereby WA is guaranteed a floor of 70 cents in the dollar.
Previously, WA had received as little as 28 cents in the dollar, and under the old system, WA would have only received 10 cents of its GST dollar.
In terms of housing, the most notable budget feature was the $875 million injection into social housing – the largest one-off of its kind in the state’s history.
This includes funding for 3,300 new social housing properties, more than what has been delivered over the past nine years by the McGowan and Barnett governments combined.
Although this has been welcomed, organisations such as Anglicare WA said that more needs still to be done. They estimate the social housing shortfall will be 21,000 social houses by 2031.
Local industry bodies the Urban Development Institute of Australia (UDIA), the Real Estate Institute of Western Australia (REIWA) and the Property Council of Australia (PCA) have all provided their reactions to the budget.
The UDIA welcomed the two-year extension of the Transfer Duty Rebate Scheme for off-the-plan units and apartments, which UDIA WA CEO Tanya Steinbeck said will deliver greater housing choices to buyers.
“UDIA fully supported the introduction of the rebate scheme in October 2019 and it has been demonstrably successful in getting more new apartment projects off the ground and creating jobs,” Ms Steinbeck said.
“We hope that continuing the scheme will also have a positive impact on the current low vacancy rate.”
Tanya Steinbeck, UDIA WA
She complimented the government on its strong budget position, while reiterating that the performance was in part thanks to the development and construction industries.
“The building stimulus had a significant impact on our industry last year and developers and builders stepped up to the plate to do their part and contribute to exceptional state growth,” Ms Steinbeck said.
However, Ms Steinbeck criticised the budget for not adequately addressing the skills shortage, which she said would be vital to help the commitment to social housing.
“We need a much more targeted commitment to getting people here, not just for the sake of the building and construction industry, but also in areas such as agriculture, hospitality and tourism who are all equally desperate,” Ms Steinbeck said.
REIWA President, Damian Collins, also welcomed the commitment to social housing and the rebate extension.
However, Mr Collins was critical that the budget didn’t include bold housing reform, something he felt could have been addressed given the surplus.
“The private sector provides the vast majority of housing… and issues such as stamp duty, as well as the current review of the Residential Tenancies Act and its implications, can have a material impact on the supply of rental housing,” Mr Collins said.
Prior to the budget, REIWA had listed four key areas of stamp duty reform to be addressed. Apart from the rebate, the others weren’t addressed which Mr Collins found disappointing.
“We are particularly disappointed no consideration was given to implementing a two-stream stamp duty revenue collection method,” Mr Collins said.
“Reforming stamp duty by implementing a two-stream revenue collection method would remove one of the biggest financial hurdles buyers face and result in a significant productivity boost for our economy.”
Damian Collins, REIWA
The Property Council of Australia (PCA) also welcomed the budget, with WA Executive Director Sandra Brewer noting that is paramount the state attracts enough talent to fill current skill shortages.
“WA businesses are crying out for people, and today’s Budget provides a platform to win the ‘brain gain’ from 2022,” Ms Brewer said.
The PCA also welcomed the boost in funding for hospitals and social housing, along with the $50m million Industrial Land Fund.
“WA is running out of well-located, well serviced industrial land that can service the influx of diverse investment opportunities coming to WA. The Industrial Land Fund will help unlock industrial land and bring it to market more quickly.”
Sandra Brewer, Property Council
Ms Brewer said while the budget focused on key investments across housing, health and economic diversification, the industry is focused towards 2022 and beyond.
“What we want to see from government is a strong and unwavering commitment to population growth to ensure our relative economic and health strength translates into the best possible outcomes for Western Australians.”
“WA is a great place to live. We are without doubt the envy of Australia right now.”
“This budget has delivered the investment needed to ensure our social infrastructure is equipped to meet the challenges ahead and guarantee WA emerges from COVID on top,” she concluded.