Mini-budget will not save NSW: Developers

By Adam Coleman

A developer’s lobby group has criticised the NSW Government’s mini-budget for failing the construction industry and called for the immediate waiving of state infrastructure levies and the forced reduction of local council levies.

The New South Wales government delivered the mini-budget today, which forecasts for a budget deficit of $917 million this financial year.

The mini-budget also outlines plans to cut $3.3 billion from its planned spending over the next 4 years and includes targeted expenditure of $850 million, including measures to stimulate the local economy.
But according to Urban Taskforce – a coalition of major developers – the construction industry was surprised there were no major initiatives to revive the rapidly eroding sector.
“NSW has always been reliant on property development to pull it out of economic slowdowns,” said Urban Taskforce’s chief executive, Aaron Gadiel.

“But it’s not enough for the government to cross its fingers and hope that urban development will just happen. NSW development activity is in rapid decline and urgent government action should have been a centrepiece of today’s mini-budget.”

Mr Gadiel says that construction activity is low everywhere, but NSW has been particularly hard hit.

According to Urban Taskforce data, in September 2008 seasonally adjusted NSW home approvals fell by 26 per cent, compared with a fall of 4 per cent fall in Victoria and in Queensland home approvals actually increased by 3 per cent.

“We’ve just seen the lowest NSW monthly home approvals in the entire history of Australian Bureau of Statistics record-keeping,” says Mr Gadiel.

“This fact alone should have been enough to prompt the state government to announce a major economic stimulus measure for the development sector.”

The mini-budget also provides for a review of infrastructure levies, including Section 94 levies – a valuable source of revenue for local government – to stimulate new housing construction. 

Mr Gadiel questioned why a further review is even required.

“The NSW economy needs swift action – today’s mini-budget should have immediately waived state infrastructure levies and forced a reduction in local council levies.”

Cash-strapped local government in the state would no doubt have something to say about that.

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