A special briefing for Australia's leading residential chief executives
Residential Developers Executive Brief - December
Welcome to the last HIA Residential Developer e–brief for 2008.
This issue looks at:
Our industry leader for this issue is Danny Murphy, Managing Director, LWP Property Group and member of HIA WA’s Presidents' Industry Activity Forum.
HIA wishes you a safe and peaceful Christmas and New Year break, and looks forward to keeping you informed about issues affecting your industry in 2009.
The HIA Residential Developers’ e-brief is a quarterly report provided to HIA members. If you wish to update your contact details or include other staff in your company on the distribution list please contact HIA
HIA-RP DATA RESIDENTIAL LAND REPORT LAUNCHED
HIA, and RP Data, Australia’s leading property information service have formed an alliance to produce a new land report that will help fill the gap in understanding vacant land markets across Australia. The report will be published quarterly in 2009 and will include extensive commentary on land supply across Australia.
The inaugural HIA-RP Data Residential Land Report recently released confirms the enormous increase in land prices that has occurred in recent years. Of concern is the shrinking level of activity in the development of residential lots.
:: READ MORE - For a copy of the report click here
AUSTRALIA’S FUTURE TAX SYSTEM – CONSULTATION PAPER
The Federal Government has released a Consultation Paper on Australia’s Future Tax System seeking further comment and submissions in response to a series of questions.
As expected, the Paper includes a significant amount of commentary in relation to taxation on residential property. The paper indicates that Federal Treasury will host a debate regarding the pros and cons of Negative Gearing and Capital Gains Tax and their impact on housing affordability.
HIA addressed these issues in a submission identifying that a draft study conducted in association with ACIL Tasman (economic consultant) noted the impact of negative gearing on house prices for the period 1998 to 2004 was statistically insignificant.
HIA has urged the review to consider new incentives for housing investment to address the ‘chronic deficiency’ in the supply of affordable housing and the over taxation of property by all levels of government.
:: READ MORE - To obtain a copy of the Consultation Paper click here
:: READ MORE - Click here for HIA’s submission
CARBON POLLUTION REDUCTION SCHEME – DETAILS RELEASED
The Federal Government has released the White Paper on Australia’s proposed Emissions Trading Scheme (ETS). The scheme is scheduled to commence 1 July 2010.
The White Paper identifies a target range for emission reduction by 2020 of between 5 to 15 per cent. A starting price of $25 per tonne for companies that emit more than 25,000 tonnes of CO2 has been confirmed.
The majority of essential building products will be captured by the Scheme – glass, bricks, concrete, iron, steel and aluminium, along with transportation costs associated with moving these products.
There has been no change to the proposed support packages for business and households. The Government has announced that $6 billion will be made available each year to support households.
Following the implementation of the scheme there is clearly the potential for more building products to be imported rather than manufactured. Imported building products may produce higher emissions than carbon-constrained, locally produced building products.
HIA is working on a suite of measures designed to offset associated costs on new housing arising from the implementation of the ETS. Further detail on these will be provided early in the new year.
The White Paper is available from www.climatechange.gov.au
:: READ MORE - Click here to view the media release
FIRST HOME OWNERS GRANT
In a welcome boost to first home buyer affordability the federal government increased the First Home Owners Grant (FHOG) to $14,000 for existing homes and $21,000 for new homes. This doubling of FHOG to existing homes and tripling to new homes will enable thousands of young Australian’s to achieve their dream of home ownership.
This additional stimulus to first home buyers will only be available to purchasers up until the 30th of June 2009 and to be eligible for the grant any new home must be started prior to the end of 2009.
In spite of this strong boost to the new housing market, HIA warns that 2009 will remain a very tough year for the residential housing industry as we manoeuvre through the harshest economic conditions in 15 years and continue to struggle with the usual suspects of slow approvals, red tape and exorbitant taxes and charges.
HOUSING INDUSTRY ADVISORY GROUP
The first meeting of the Housing Industry Advisory group has been held with the Federal Treasurer, Wayne Swan and the Housing Minister, Tanya Plibersek. The group is co-chaired by HIA’s National President, Bruce Langford-Jones, and Brendan Crotty, a member of the National Housing Supply Council and former Managing Director of Australand. Other members of the group include senior executives from building, development and building materials manufacturing companies.
Industry leaders took the opportunity to raise specific concerns in respect to the availability of finance and the various restrictions now imposed. Credit rationing is now plaguing the industry particularly in the medium and high rise development sectors and unless a solution is found, further reductions in output and employment look certain. The other issue raised was the availability of serviced land to meet demand from the addition to the First Home Owners Grant.
INDUSTRIAL RELATIONS UPDATE
Wilcox Inquiry
HIA has made a submission to the Wilcox Inquiry regarding the government's policy to abolish the ABCC and fold it into a specialist inspectorate within the proposed Fair Work Australia. HIA has asked for the inspectorate to have jurisdiction over the entire construction industry, including housing and the manufacturing supply chain. HIA has also suggested the inspectorate have a range of additional powers to enforce a positive industrial relations culture and to stamp out union intimidation and abuse.
New IR Legislation
The government has tabled its draft IR Laws. The success of the new laws will depend on strong enforcement. HIA remains extremely concerned that laws appear to enhance union right of entry. HIA is making further submissions for greater security and clarity for business.
Unfair Dismissal
While small business will not welcome the new unfair dismissal laws, the laws should avoid many of the pitfalls of previous unfair dismissal regimes. In particular, the extended 12 month probation period and the Fair Dismissal Code represent a workable solution to a difficult policy issue.
Award reform
The AIRC will begin consultation on modernising our industry’s awards in December. HIA has developed a draft model modernised award suitable for residential construction. It includes the types of flexible arrangements members have traditionally sought through workplace agreements. This includes the capacity for all in rates – loaded hourly rates in lieu of entitlements such as penalty rates, overtime and allowances – and flexible RDO arrangements.
You can subscribe to HIA’s Economics Group to obtain our regular reports on housing performance and forecasts. Contact Kirsten Lewis at k.lewis@hia.com.au or on (02) 6245 1393
You may also wish to consult our website: economics.hia.com.au to access the HIA Economic Group’s Event Calendar. |
