What’s happening at Consult Australia Consulting Matters
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Why property tax reform is an important part of creating a more sustainable building industry AS COVID-19 IMPACTS AND RESTRICTIONS WERE STARTING TO TAKE THEIR EFFECT ON THE ECONOMY, CONSULT AUSTRALIA LAUNCHED HEALTH CHECK SURVEYS TO DEVELOP A BETTER UNDERSTANDING OF THE IMPACT ON OUR INDUSTRY AND LEVELS OF CONFIDENCE. property tax reforms as part of their longerterm response to economic impacts, particularly as governments shift to a less reactive approach with the recession passed. Many may think the connection between our industry and property taxes is hard to draw. However, taxes have a significant impact on the investment appetite within the property market. This investment appetite is what drives demand in the building industry for the design, advisory, and engineering services provided by our members. While repealing all property-related taxes would be a quick fix for attracting more investments and creating more work demand for our industry, we do not believe this is fair or logical. It makes sense to tax those who are benefiting from the use of land. A better approach is improving current property taxes through reforms that address current challenges and are designed with intended benefits in mind. For example, challenges include: The pulse survey results were quite decisive. Most member businesses were experiencing a significant reduction in work, and the average downturn equated to at least onequarter of normal operations throughout this six-month period. Businesses that were by far most impacted were those providing services to privately funded projects, and more specifically those relating to building projects. Thankfully, with well-directed stimulus such as the HomeBuilder scheme and an overall upswing in the health of the broader economy, these impacts have turned around considerably in our most recent health check survey in April this year. Consult Australia reflected on these results in June last year and decided to partner with members in a project to investigate how governments could provide a longerterm solution to a volatile property market and building industry, outside the traditional approach of stimulus funding. With our smaller and medium-sized businesses experiencing the greatest impacts, we put
together a working group of SME members to explore potential opportunities. In March this year, this project resulted in the release of Consult Australia latest thought leadership report: Unlocking Stimulus from Property Tax Reforms. Our property tax reforms report sets out our recommendation to state/territory governments to investigate and include
•d istorting the market by negatively influencing investment decisions to purchase property by applying a stamp duty at the point of sale, and •h ighly volatile funding sources by pegging revenue to the current performance of the property market.
Many may think the connection between our industry and property taxes is hard to draw. However, taxes have a significant impact on the investment appetite within the property market. This investment appetite is what drives demand in the building industry for the design, advisory, and engineering services provided by our members.
