Sydney CBD crossing traffic lights
Benjamin Sow, Unsplash
  • REINSW CEO says the State Government ignored issues in the property sector fueled by Covid
  • Acknowledges credit is due for the handling of the pandemic itself by the State Government
  • Justifies this grade with the government failings in lack of tax reform, inefficiencies and the rental moratorium

 

Tim McKibbin, the CEO of the Real Estate Institute of New South Wales (REINSW), has criticised the New South Wales state government for ignoring issues surrounding the property sector during the pandemic.

He highlights areas such as the lack of opportunity in reforming tax, bureaucratic inefficiencies and the damage to landlords who have been adversely affected by acts such as the rental mortarium.

On a side note, however, Mr McKibbin has acknowledged the efforts of the NSW Government in terms of handling the health crisis.

Lost opportunities

Despite this, he feels many opportunities have been missed, such as stamp duty reform.

There have been numerous calls nationally for reviews of current Stamp Duty legislation. The 2020 “Buying In NSW, Building a Future” consultation paper suggests giving buyers the option to pay either stamp duty or a land tax that would be paid annually, similar to council rates.

The Paper argued this benefits younger Australians who are more likely to change jobs and careers – including having to move interstate and overseas – compared to older generations.

However, Mr McKibbin argues that this option is ‘hardly reform’.

“The opportunity for tax reform was not seized upon… The proposed property tax cannot be called a broad-based tax when it taxes only property, and at a time when the state desperately needs tax reform, Government has delivered a discussion paper. “

He also failed the government for Fair Trading’s ‘bureaucratic inefficiencies’ which he argues has left hundreds of jobs in limbo when the property industry needs more qualified people.

Mr McKibbin also argues that some measures in place to protect tenants, such as the Rental Moratorium, have come at a huge cost for landlords.

“For people who have scrimped and saved to purchase an investment property for their retirement income, or who are paying off a property for their retirement nest egg, the impacts of the rental moratorium have been devastating. The Government’s support for tenants adversely affected by COVID-19 has actually been funded by mum and dad investors,” he says.

“Property is without question the most important industry in NSW. It contributes more than any other to the state’s finances and employment and is also one of life’s essentials. The various shortcomings in the Government’s performance in relation to property last year amounts to a ‘fail’,” he says.

Being optimistic, however, Mr McKibbin has offered five suggestions on how the NSW state government can improve their grades so next time they could receive a A+.

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