The property and construction industry in South Australia has slammed moves to slug property owners with a hike in the emergency service levy (ESL) and introduce a car parking tax, saying the measures will impact property owners and diminish investor appeal for commercial property in Adelaide.
In a statement following the State Budget last week, Property Council of Australia acting executive director Lino Iacomella acknowledged the government’s efforts in continuing infrastructure work from earlier budgets and introducing and $8,500 grant to help citizens aged 60 and over to downsize into more appropriate sized housing.
He slammed the new tax measures, however, saying the property sector could not be expected to continue to do the ‘heavy lifting’ of addressing Budget shortfalls.
“It is disappointing that property owners once again bear the brunt of tough Budget measures,” Iacomella said. “The increase in the ESL will affect all property owners and it adds to the growing cost of owning property."
“The car park tax will hurt retailers in the city centre and diminish investor appeal for CBD property. Adelaide needs incentives to help grow the state economy not another tax that will add to the cost of doing business in the city.”
Iacomella’s comments follow government announcements in last week’s Budget that around 650,000 residential and commercial property owners would be hit with a hike in the emergency services levy (ESL) and that a new transport development levy of $750 would apply to a number of off-street and ticketed on-street car parks within the Adelaide Central Business District.
While funds from the new levy – which is otherwise known as a ‘car-parking tax’ – would be used to pay for transport service improvements, the State Government blamed the increased ESL on Federal cuts to healthcare, saying the previous situation whereby the ESL covered less than half of the cost of providing emergency services was no longer viable.
For residential property owners, the cost of the increased ESL charge is expected to average around $150.
The car parking levy has been met with staunch opposition from property industry lobby groups since the idea of its introduction was first flagged in the 2012/13 Mid-Year Budget Review.
Last week, the Council joined forces with Business SA, Rundle Mall Management Authority, The Real Estate Institute of South Australia (REISA), The Urban Development Institute of Australia (UDIA) and the Local Government Association (LGA) to voice their opposition to the tax’s introduction, saying the it represented a narrowly-based ‘ad hoc’ approach toward revenue raising which created winners and losers on an unfair basis.
Meanwhile, in the construction sector, Housing Industry Association (SA) executive director Robert Harding echoed criticism of the new tax and tax hikes and described the Budget as a ‘mixed bag’ which had some positives but did little to address either the cost of new housing or the systematic decline in the state’s manufacturing sector.
“There were a number of positives which came out of the 2014 budget for residential builders in South Australia,” he said.
“The main positive to note was that the State Government has continued the State component of the First Home Owners Grant. Also continuing is the Stamp Duty concession on inner city apartments and the continuing undertaking to phase out that Grant from June of 2014.”
“The important negatives to the Budget are that every property owner in South Australia is being asked to fund the shortfall in Commonwealth Funding.”