The 2018-19 federal budget had no measures that specifically addressed housing supply and affordability, according to the Real Estate Institute of Australia (REIA).
“Whereas housing affordability was a centre piece of the 2017 budget, there was nothing in this year’s budget that directly addressed this,” said Malcolm Gunning, president of REIA. “It was, however, pleasing to see that the government recognises the important role that the current taxation arrangements for negative gearing and capital gains tax play in increasing supply, keeping rents affordable and easing the burden on social housing by leaving these unchanged.”
Gunning added that the budget’s approach recognises the state of the property market and the impact that the Australian Prudential Regulation Authority’s (APRA) measures had in cooling the market, particularly in Sydney and Melbourne. Hence, Treasurer Scott Morrison saw no need to make further adjustments.
“A boost to infrastructure spending, modest improvements in housing income for lower income earners, continued tax write offs for small to medium business and growth in employment can be expected to be mildly expansionary, particularly for regional economies,” Gunning said.
“The good news for home buyers is that the budget is not expected to put pressure on interest rates as inflation is expected to remain within the RBA’s target zone. This expected interest rate stability comes at a time when housing prices in some of our major cities are showing signs of easing, leading to improved affordability for first-home buyers.”
According to Paul Drum, head of policy at CPA Australia, this year’s budget has been framed against a backdrop of a strengthening economy, with the forecasted additional revenue being used in part to fund personal tax cuts as well as an increased investment in infrastructure and the ageing population.
“The budget includes a raft of income tax, GST and superannuation changes that will impact individuals, businesses and super funds and therefore the provision of client-based business and investment advisory services,” Drum said.
“The government’s seven-year personal income tax plan promises much over a new glide path similar to the ten-year Enterprise Tax Plan. But, like the company tax cuts, the question is whether this plan will garner the support it needs to get through the parliament.”