The Property Council of Australia has raised concerns over the NSW government’s budget, which is expected to impose a $6.38 billion cost hike on the property sector amidst a housing and construction crisis.
NSW Treasurer Daniel Mookhey (pictured above left) has presented the Minns Labor government’s second budget, revealing a $3.6bn deficit alongside a significant $6.6bn investment in social housing and homelessness.
The NSW budget introduced several changes:
These measures are projected to generate an additional $1.68bn over the forward estimates.
Property Council NSW Executive Director Katie Stevenson (pictured above right) highlighted the severe impact of these changes, particularly the $4.7bn cost shift of the emergency services levy (ESL) from insurers to property owners.
“This budget bombshell beggars belief,” Stevenson said. “It’s a massive cost for property owners and developers facing a once-in-a-generation housing supply and affordability crisis.”
Stevenson stressed the detrimental effect these costs will have on housing delivery, noting that the property sector already contributes 18% of Australia’s tax receipts.
“This additional ESL burden, along with increases to land tax and foreign surcharges, will only serve to impact the feasibility of the delivery of Housing Accord targets,” she said.
The budget’s $6.6bn investment in social housing and homelessness services aims to build 8,400 social homes, with 6,200 new homes and 2,200 replacements.
Additionally, the Building Homes for NSW program will restore over 33,500 social homes, backed by an $810 million maintenance investment. There are also allocations for front-line homelessness services, Aboriginal housing repairs, and various housing-related initiatives.
While acknowledging the positive focus on social housing, Stevenson cautioned against the cost hikes.
“While the government’s record investment in social housing must be applauded, these additional costs add to the pressures facing the property and construction industry,” she said.
Stevenson expressed hope for urban renewal and economic stimulus from social housing spending but stressed the need to avoid increased property costs at this critical time.
“Now is not the time to increase property costs or cut off access to vital investment in housing,” she said.
To read the Property Council media release, click here.
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