The South Australian budget has received the thumbs up from the property development and construction industry.
Property Council of Australia SA Division Executive Director Nathan Paine says that combined with the fact that of there being no additional tax burden for the property sector, a combination of the state government’s stamp duty reform and the extension of the First Home Bonus Grant meant that the budget was a positive outcome for the industry even as the government moves to cut fiscal deficits.
“Nobody expected this to be a pain-free Budget, but overall the property sector came out relatively unscathed” Payne says.
“And one of the lynchpin components of the 30-Year Plan for Greater Adelaide – a populous CBD – has been given a real boost by the stamp duty reforms”.
Prior to the budget, the state government announced a measure under which stamp duty will be abolished for the next two years for people who buy an apartment in either the Adelaide CBD or North Adelaide under $500,000, whilst properties valued over and above this level will get a capped concession.
The government also announced a one-year extension to the $8,000 First Home Owners Grant, which was originally set to expire in July.
Payne says the measures will put apartments on a level playing field with urban house and land packages, unleashing demand for inner city living and creating more work for building and construction firms.
But Payne says the suspension of major transport infrastructure projects – specifically, the $2.1 billion electrification of Adelaide’s metropolitan rail network – was a concern given the integral role of transport in the 30 Year Plan For Greater Adelaide, albeit with the suspension being an understandable move given fiscal constraints faced by the government.
More broadly, however, business groups have criticised the budget for sending ‘mixed messages’, especially to the manufacturing sector.
Stephen Myatt, Australian Industry Group Director, South Australia, welcomed the government’s commitment to embrace the recommendations of Thinker in Residence Professor Roos to transition and reinvigorate manufacturing along with the development of a new training centre for mining, engineering, defence and transport at Regency Park.
But he questions whether resources put forward in the budget are sufficient to deliver on Roos’ recommendations and criticised the abolition of payroll tax relief for companies employing apprentices and trainees.
“It [abolition of payroll tax relief] is a retrograde step for employers committed to employing apprentices and sends all the wrong signals at a time of skills shortage”.