2020/21 Victoria State Budget: What we know and what we’ll be looking for.
After deciding earlier this year to delay the State Budget for 2020-21, the Andrews Government has confirmed the Victorian Budget will be delivered next week, Tuesday 24 November.
What we know.
We already know that record investment in public and community housing will be a feature of this Budget with $5.3 billion funding to build more than 12,000 new homes throughout metro and regional Victoria.This will support around 10,000 industry jobs, per year over the next four years, giving us a significant economic boost, and giving Victoria’s building, development and construction industry a project pipeline we can rely on.
This commitment from Government is a big win for our industry, and for Victoria. It’s something UDIA recommended in our Pre-Budget Submission, where we explained how current economic conditions have led to an even greater need for social and affordable housing.
As part of our recommendation, we highlighted the need for Government to incentivise, and partner with industry, to deliver large-scale affordable housing. We commend the Andrews Government on listening to our calls as we enter a new era of cross-sector partnerships.
We also know the Budget will have a focus on infrastructure, recognising that COVID-19 has not given us a reason to slow down – it has given us a chance to play catchup before population growth returns.
The Budget will include $2.2 billion to kickstart Stage One of the Suburban Rail Loop, which will provide up to 20,000 jobs during construction and give Victorians more choice about how and where they want to live.
So what we know about the Budget so far is extremely positive and will make great headway in rebooting Victoria’s position as an attractive place to live, work and invest.
What we’re looking for.
The areas we’ll be looking closely at come Budget Day include housing demand stimulus measures, including the halving of stamp duty for new residential property acquisition to December 2022.
Halving stamp duty is a win-win for Government and homebuyers. It would help buyers into the market, resulting in economic activity and jobs without while also protecting Government’s tax revenue. It would also help plug a gap in the HomeBuilder scheme by supporting the apartment sector.
Speaking of HomeBuilder, we are advocating for the scheme to be expanded in this state, acknowledging our stage 4 restrictions did not enable Victorians equal opportunity to claim the grant.
A big feature of our pre-budget submission is the recommendation to establish Victoria as the Homeowner State. We must recognise that Victoria’s success has been largely driven by population growth. But with the second COVID wave, we lost our competitive edge against other Australian cities in attracting both people and capital.
To repair the Victorian economy, we must elevate our position as an attractive place to live, work and invest. We can do this by:
- targeting domestic demand;
- removing foreign purchaser surcharges;
- incentivising businesses to relocate here; and
- reforming the state tax system to make housing more affordable.
We also need serious planning and development system reform. A review undertaken by the Commissioner for Better Regulation last year found that unnecessary delays have big knock-on impacts such as keeping families renting for longer, and increasing the costs of permit approvals. At the end of the day this puts upward pressure on house prices and rents, severely compromising Victoria’s appeal. That’s why we’ve recommended urgent implementation of the reforms suggested through the Commissioner’s review.
One feature of this year’s UDIA Victoria pre-budget submission is directly in response to the pandemic. We’ve highlighted the importance of Melbourne’s CBD and central city, which is the geographic epicentre of Victorian jobs. We’re calling on Government to invest in the immediate reopening and reactivation of our city. You can find out more about our bold plan to reawaken our city here.
Other recommendations in our Pre-Budget Submission include:
- Stimulating urban renewal and built form development by taking a proactive approach to the development of Melbourne’s key precincts;
- A focus on fast-tracking projects; and
- Making it easier and less costly to develop new housing in our greenfield areas.
So, while we commend and welcome what we know about the 2020/21 Victoria State Budget to date, there remains several key areas that we’re looking to next week’s Budget to address. If you want to read our Pre-Budget Submission, you can find it here.
As always, UDIA Victoria will be monitoring the announcements and information coming out of Government and we’ll keep you up-to-date on what you need to know.
Engagement and Communications Manager, UDIA Victoria
T: 03 9832 9600
M: 0478 415 105