• A message from Global Head of Real Estate and Construction, Sian Sinclair

The property industry continues to do the heavy lifting on behalf of Australia’s GDP growth, with growth set to remain steady at 2.5 per cent for 2016/17 before a moderate increase to 3 per cent thereafter.

The property industry continues to do the heavy lifting on behalf of Australia’s GDP growth, with growth set to remain steady at 2.5 per cent for 2016/17 before a moderate increase to 3 per cent thereafter.

The federal election again left us without a clear leader for over a week with the nation scratching their heads as to how this can happen in this age of technology. While final numbers aren't yet known, Malcolm Turnbull has claimed victory for the LNP and only time will tell if we wind up with a stable Parliament. When races are run this closely it doesn’t bode well for our hopes of strong political leadership and action – from either side. While many were relieved when the federal budget revealed that negative gearing and capital gains tax changes were ruled out, they promptly became a political football for the election campaign.

With the planned white paper process (remember that?) shelved and an uplift in GST rates ruled out in advance of the election, the Federal Government’s appetite for any significant tax reform appears to be a distant memory.  With the election behind us now  we can only hope that the Government will again turn its mind to much needed reform, but without a clear majority its unlikely we will see the sort of political courage required to make the reforms a reality.  Perhaps the best we can hope for in the short term is for some certainty so business owners and investors can get on with business and transactions with some clarity around the economy they are operating in. 

The States have come out swinging on foreign investment in their respective budgets with Victoria increasing its Foreign Acquirer Stamp Duty Surcharge to 7% and both Queensland and New South Wales introducing their own surcharges. Combine this with the extra administrative burden that commenced at 1 July with the Foreign Capital Gains withholding and the potential to have 10% of property proceeds withheld at sale and anyone would think we are trying to discourage foreign capital from investing in our shores.

On the Global front, the biggest surprise would be the people of the UK voting to exit the European Union. The Brexit initially sent shockwaves to markets around the world and has left a lot of uncertainty in its wake as the global economy and particularly the UK come to terms with what this means.  The Brexit will take a while to negotiate and therefore means the period of uncertainty will continue.  But times of volatilty also presents opportunities. Click here for more information on Brexit and Australian businesses.

In this edition we look at the detail of the foreign withholding tax issues, how whistleblower programs are fighting fraud and corruption in the industry and Grant Thornton’s industry consultant John Elvy, gives us his views on the common dilemma of owning or leasing business premises.

The State updates bring you news and developments closer to home, with a focus on a number of announcements from the recent State government budgets handed down.  

Next article: Whistleblowing in the Real Estate & Construction industry.