Record investment in housing and planning will elevate Victoria’s position as an attractive place to live, work and invest.
Key points for the urban development industry.
- Victoria’s population growth over 2020-21 expected to be 0.2 per cent, compared with an average of 2.3 per cent over the past five years. Population growth is expected to slowly pick up to 1.7 per cent by the end of 2023-24.
- The Budget includes significant investment in housing:
- stamp duty waiver of 50 per cent for residential property transactions of up to $1 million for contracts entered between 25 November 2020 and 30 June 2021;
- $6 billion for investment in social and affordable housing;
- $500 million fund to contribute to the purchase price of a home in exchange for equity interest to accelerate Victorians into home ownership;
- 50 per cent land tax discount for parts of the build-to-rent; and
- extension to the $20,000 First Home Owners Grant for regional Victorians.
- The Budget includes significant investment in planning system modernisation including:
- $52 million to implement the Commissioner for Better Regulation’s planning reforms and to increase housing supply through the Victorian Planning Authority’s work program;
- $59 million for targeted planning system reforms including structural system reform and a review of the Planning and Environment Act 1987;
- Creation of a new fast-tracked development assessment model for major projects over $50 million, making the assessment process simpler and faster for these important projects; and
- Critical ongoing upgrades to the state’s digital planning system platform, reducing the regulatory burden for applicants and approval authorities.
- The 2020-21 Victoria State Budget is based on the assumptions that Australian borders are likely to remain closed to migrants and tourists until at least mid-2021; and that a significant return of international students will not occur until the 2022 academic year.
- Taxes on property represent approximately 44% of the State Government’s taxation revenue, down slightly from the previous financial year.
Budget overview.
The 2020/21 Victoria State Budget, handed down today, includes significant investment in jobs, housing, infrastructure, education, planning, health and tourism – important areas where meaningful investment will help attract people and capital as Victoria recovers from the economic impacts of COVID-19.
Population.
Victoria’s population growth over 2020-21 is now expected to be just 0.2 per cent, compared with an average of 2.3 per cent over the past five years. As international borders re-open, and confidence in the economic outlook improves, population growth is expected to slowly pick up to be 1.1 per cent in 2022-23 and 1.7 per cent by the end of 2023-24.
The Budget is based on the assumptions that Australian borders are likely to remain closed to migrants and tourists until at least mid-2021; and that a significant return of international students will not occur until the 2022 academic year.
Housing.
In a huge advocacy win, UDIA Victoria pitched the idea to halve stamp duty as a budget-neutral measure that would stimulate economic activity. The Government has decided to do just that with a stamp duty waiver of 50 per cent for residential property transactions of up to $1 million for contracts entered between 25 November 2020 and 30 June 2021.
In further positive news for our industry and Victorian communities, Victoria’s Big Housing Build Budget package includes a record $6 billion for investment in social and affordable housing, a $500 million fund to contribute to the purchase price of a home in exchange for equity interest to accelerate Victorians into home ownership, and an extension to the $20,000 First Home Owners Grant for regional Victorians.
The Budget also marks a new era for Victoria’s rental sector with the emergence of the Build to Rent asset class now a certainty thanks to land tax discounts and favourable project assessment models for major projects.
Planning.
In a further nod to the long running advocacy agenda our industry has pursued, the Government has made a record commitment to planning reform with a program to cut red tape, speed up assessment and approval processes and drive efficiency and productivity in coming years.
The Budget commits a landmark $111 million to unlock Victoria’s planning system, speeding up delivery of vital major projects and boosting construction of social and affordable housing and the jobs that go with them.
This includes $38 million to improve planning processes, as recommended by the Commissioner for Better Regulation; something UDIA Victoria advocated strongly for to streamline decision-making and to give the private sector greater certainty to invest, create jobs and bring business to Victoria.
To drive investment in big projects, a new assessment model for development proposals greater than $50 million will be created. This model will make the approvals process simpler and quicker for these developments, giving investors even more confidence to build more projects here in Victoria. UDIA Victoria understands we will have a seat at the table as the Government develops and actions this assessment model.
Infrastructure.
Government infrastructure investment is expected to average $19.6 billion a year over the Budget and forward estimates – around four times the 10-year average to 2014-15.
This includes $2.2 billion to kickstart Stage One of the Suburban Rail Loop, and $4.7 billion of country road and rail upgrades including $2 billion to progress the Geelong Fast Rail.
Jobs and Business Investment.
Job creation is at the heart of the Budget, which includes and ambitious Jobs Plan to create 400,000 new jobs by 2025 and 200,000 by 2022.
The Plan includes a new $619 million Jobs for Victoria initiative focused on up-skilling and getting people back to work. The initiative is coupled with $1.5 billion in new tax relief for Victorian businesses and families; plus $300 million to help draw more overseas investment, support local industries and create jobs here in Victoria.
Property Taxation.
This Budget tells us that 44 per cent of Victoria’s tax income is derived from property, making our industry a fundamental plank of our economic recovery, and an industry that is well-placed to play a leading role in Victoria’s road to recovery.
Overall Sentiment.
This is a hugely positive Budget for our industry, and for Victoria.
Record investment in housing and infrastructure, and funding to modernise the planning system, will supercharge the economy and elevate Victoria’s position as an attractive place to live, work and invest. This will support our economic recovery by encouraging property activity and interstate migration until international migration resumes at a meaningful level.
With this Budget, UDIA Victoria is confident that our building, development and construction industry will continue delivering the housing, communities and economic contribution that our state needs.
We commend the Andrews Government and look forward to our continued collaboration.
Click here to read the full UDIA Victoria summary of the 2020-21 Victoria State Budget.
Click here to read the 2020-21 Victoria State Budget papers.
MEDIA CONTACT
Hyatt Nidam
Engagement and Communications Manager, UDIA Victoria
T: 03 9832 9600
M: 0478 415 105
