UDIA Victoria Media Release
Modelling released today by the Urban Development Institute of Australia (Victorian Division) shows the future introduction of a rezoning tax will result in an economic loss to Victoria of $7.7 billion and up to 100,000 jobs.
UDIA Victoria’s modelling supports the position adopted by the urban development industry since the Andrews Government’s State Budget announcement of the new tax – that it will render many future property development projects unviable, impact Victorian housing affordability and directly take out thousands of jobs.
“UDIA Victoria’s modelling illustrates the dire impact of the rezoning tax, with a short-term tax take sugar hit leading to long-term and far reaching consequences,” said Matthew Kandelaars, CEO of UDIA Victoria.
“The imposition of a rezoning tax in its current form, and the disincentive for developers to rezone and develop land, will have a materially negative net impact on the Victorian economy and the Budget. This proposed new tax doesn’t make sense on any level.”
The UDIA Victoria modelling shows that on the basis of just 7 development case studies – 4 in metropolitan Melbourne and 3 in regional Victoria – each property project will be rendered unviable and not proceed, resulting in:
- A reduction in housing supply by 6,696 dwellings (including over 300 affordable, social or disabled access dwellings valued at $160 million);
- 20,000 fewer direct jobs and nearly 100,000 fewer indirect jobs in Victoria;
- $170 million in foregone Stamp Duty receipts to the Victorian Government;
- A reduction in Victoria’s economic output of nearly $7.7 billion.
“Not only does this proposal have the potential to freeze development throughout Victoria, it has already done so at a time when our economic recovery out of COVID is in such a fragile state,” Mr Kandelaars said.
“The clear and consistent feedback from the Victorian development industry is that it urgently needs certainty and confidence to proceed with current, let alone future projects.
“This is just the tip of the iceberg. Such an enormous economic hit across just a handful of projects shows how dangerous this tax has already become, just weeks after its announcement and even before it’s been legislated.”
UDIA Victoria remains ready to constructively work with the Andrews Government and help develop alternative policies that will support the Government’s revenue base, without killing projects and driving up house prices.
“There’s got to be a better way to turbocharge Victoria’s economic recovery and support community services and infrastructure. Residential housing development is an important part of this equation,” said Mr Kandelaars.
“It is not too late. We want to urgently sit down with the Government, be constructive and genuinely engage in consultation, and bring the expertise and goodwill of industry to find a workable, sustainable solution.”
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Matthew Kandelaars: Chief Executive Officer, UDIA Victoria
M: 0416 443 555
Adi Stevens, RoyceComm
M: 0407 411 088