Another year, another PM. That’s five in five years, so one could be forgiven for thinking that Australia is governed by the opinion polls!
The changes made to the top job last week are still in the honeymoon period with Malcolm Turnbull’s popularity soaring after announcing his new cabinet this week. We welcome the appointment of Jamie Briggs as the first Minister for Cities and Built Environment, which in itself is a declaration of the importance placed on urban planning by the Prime Minister. Let’s just cross our fingers that the changes in Canberra don’t mean a setback in the Tax Reform process that is underway.
Since July we have seen a slight slump in business confidence following concerns about the ongoing slowdown and market turbulence in China. While, some observers believe the property cycle has peaked in some markets, recent ABS data indicates overall building approvals have climbed once again with July showing a 4.2% increase on the prior month. The positive increase provides some reassurance for the ongoing supply of vital new housing to improve affordability.
Residential affordability continues to be topical, with property prices rising faster than incomes and causing a huge transfer in wealth from younger to older generations. It remains to be seen how the intergenerational transfer of this wealth will play out and the impact on the nation and the housing market moving forward.
The low interest rate environment and falling Australian dollar looks to be helping the economy through a period of transition from mining sector led growth, however more investment in new infrastructure assets will be critical to enable sustainable expansion of the economy. Investment in better infrastructure, specifically transport, will help open up the supply of well positioned land and assist housing affordability.
As he settles into the job and undertakes a review of policies, we need our new Prime Minister to put the focus back on the national tax reform process and review of the Federation Model. Whether it's through our new Minister for Cities or otherwise, the industry needs to voice its concerns and make property taxes and their impact on housing, investment and development activity at the forefront of the reform agenda.
Next article: Reforming Australia’s Federation and Tax System
