Wind back to the peak of the resource boom and the Western Australian economy was riding high.
Fast forward to now and the state’s economy (measured by state final demand) contracted by 10.6 percent over the year to September whilst unemployment has risen from 5.6 percent two years ago to 6.5 percent today. In the property sector, office vacancies sit at 22.5 percent whilst Housing Industry Association expects dwelling commencement numbers in 2017 to come in at their second lowest level in fifteen years.
Not surprisingly, therefore, Western Australia is the only state in Australia where participants in the latest Property Council of Australia Property Industry Confidence Survey expressed net pessimism about the next twelve months.
In all this, the state heads to an election on March 11. In the leadup, the Western Australian division of the Property Council of Australia outlined five of what it said were priority actions for the whomever rules over the next three years. These included:
- Creating a state infrastructure plan which is funded from land sales and the sale of public assets like Western Power
- Ruling out any increases in land tax and stamp duty rates in the next term of government and move quickly to phase out land tax aggregation
- Maintaining independent Development Assessment Panels
- Passing legislation in 2017 to create community strata titles; and
- Creating mandatory housing targets for seniors in state and local planning laws.
Not all of these are front of mind for the politicians. Strata reform has not rated a mention in any major party’s policies; ditto for independent DAPs.
More headway is being made on seniors’ housing. Liberal, for instance, has announced plans for stamp duty concessions for seniors who move into homes which are smaller and easier to take care of.
The big area of controversy is whereby plans on the part of The Liberals to raise $11 billion from which to pay down debt and invest in infrastructure by selling down 51 percent of Western Power is fiercely opposed by Labour on the basis that it would lead to higher energy prices and deny the government of an important revenue stream. Plans to sell Freemantle Ports are opposed by Labour, The Greens and One Nation.
Priorities also diverge among parties. The Greens, for instance, are focusing heavily on sustainable infrastructure and housing for the less well-off. The Nationals, meanwhile are more concerned about rural initiatives and One Nation seeks largely to curtail foreign investment in housing.
On the issue of infrastructure, the two major parties differ in that the Liberals are looking at a wider range of projects and delivering upon existing initiatives whereas Labour is banking more heavily upon a singular big ticket item in its Metronet.
Below is an outline of key policies which the major parties and some significant minor parties are pushing.
Start with the current government. One change it has promised involves lifting the current threshold above which land tax will come in from $300,001 to $360,000. The government will also introduce stamp duty concessions for seniors of up to $15,000 for new and established homes worth up to $750,000 and up to $10,000 for the purchase of vacant residential lots worth up to $400,000.
The Liberals are also planning to raise $11 billion by selling 51 percent of Western Power by ways of public float - $8 billion of which will go toward paying down debt and $3 billion of which will go toward new infrastructure. The party also plans to raise money through the sale of Freemantle Port.
In terms of infrastructure, most of the Liberals’ focus revolves around projects which are already announced or underway. Promises include: completion of the development of Yagan Square and the opening of the link between Perth and the CBD; working with developers to ensure that the redevelopment at Elizabeth Quay is able to reach its full potential; development of a new arts museum; finalisation of the troubled Perth Children’s Hospital project; continuation of the Perth CityLink project and completion of the Forrestfield Airport Link Project; the redevelopment of Joondalup Hospital and the redevelopment and expansion of Geraldton Health Campus. The Liberals are also pushing heavily into school infrastructure, promising $182 million worth of new schools in the Greater Western Suburbs area and $91 million on high schools in areas adjacent to the city’s west.
From an affordable housing perspective, the WA government says it has delivered five years early on its 2020 target for delivering 20,000 affordable homes and has set a revised target of 30,000 affordable homes by 2020.
The Liberals have also promised not to raise taxes or bring in new taxes.
The Labour Party
In contrast, Labour says it would not pursue privatisation and would refuse to privatise Western Power or Freemantle Port, arguing that the privatisation of the former would drive up power bills, impact service quality and deny the government an income stream which was worth more than $550 million in 2015/16.
As far as the property and construction sector is concerned, the Labour Party is pinning its hopes largely in terms of infrastructure. Chief among its pet projects its flagship METRONET project, which Labour says will connect suburbs within Perth with an integrated network of rail lines. The project will include new lines to Yanchep, Byford, Moreley-Ellenbrook, completion of the Forrestfield-Airport line, Commencement of a new circle line which will link suburbs in all directions via a ring, the removal of dangerous level crossings , new railcards and integrated bike paths and cycling facilities. A special purpose account will be established to ensure funding for the project, Labour says.
Labour also plans to establish a new state infrastructure body and publish a state infrastructure strategy.
A further part of Labour’s strategy revolves around attempting to enable greater participation of local workers and small businesses on large-scale government contracts. Toward this end, the Party says it will enact legislation to create opportunities for small and medium sized businesses to compete for government contracts. Labour will also tear up the list of occupations which fast tracks workers from overseas and ensure that apprentices and trainees are given opportunities on all major projects.
Perhaps surprisingly, Labour does not appear to have much in the way of substantial policies on housing. It would appear that they see other issues as being more pressing at this time.
Perhaps not surprisingly, the policy focus of The Greens revolves primarily around issues such as what they see as social fairness and equity as well as environmental sustainability. Equally unsurprisingly, it is this focus which flows through to some of their policies which impact the built environment.
In terms of housing, The Greens would develop a state housing plan, adopt a target of 8 percent public and social housing across each locality by 2029, require new residential developments of more than ten lots to provide 25 percent affordable housing for low income earners, increase developer contributions for urban fringe development, support the development of housing precincts on infill land and review both the National Construction Code and the Western Australian Residential Design Code as well as the WA Town Planning and Development Act to reduce barriers to medium density and mixed use developments.
Believing that the current infrastructure planning system adopts an excessive focus around private vehicle and road freight, the Greens would seek a greater role for alternatives such as walking, cycling and public transport. Toward this end, they would fund expansion of the public transport system, with the implementation of an urban light rail system in Perth being one of the critical priorities. The Greens would also ensure that the government retains control over rail infrastructure an management of the network and would introduce reforms to redress what it says is an imbalance of power in funding and decision making between Main Roads and other transport agencies.
The Greens would also reform the planning system in ways it says would strengthen the role and accountability of local government in planning decisions, provide for greater community involvement in planning decisions and require decision makers to publish reasons for their decisions.
The Greens would also increase minimum requirements for energy and water use efficiency in new buildings and provide incentives for owners to exceed these requirements.
Consistent with its general political persuasion, the One Nation party in Western Australia adopts a somewhat hostile approach toward foreign investment especially in property. Its policy documents talk about ‘immigration-fed population growth’ placing upward pressure on land and housing prices, a ‘third world like’ rate of population increase underpinning demand for 800,000 new homes and ‘dirty’ foreign funds flowing into Australian real-estate.
Toward this end, the party wants a new foreign buyer tax levied at a steep 20 percent along with a new additional duty on purchases made by what it refers to as ‘non-resident’ foreigners. The party would also crack down on ‘dirty’ foreign money flowing into Australian property and try to work with One Nation colleagues at a federal level in order to have immigration levels reduced.
The party says it will also pursue inclusionary zoning policies on government land and housing development to make 15 percent of new dwellings affordable to low income earners, reduce stamp duty for eligible seniors who are downsizing, review state taxes and their effect on housing affordability and reduce stamp duty costs when eligible seniors choose to downsize.
On infrastructure, One Nation wants to establish Bunbury as the state’s second city, relocate government departments to rural areas, support the creation of an independent infrastructure body, examine other options to the Port of Freemantle sale and push to reduce waiting times for the WA Planning Commission to make assessments. It would also examine the idea of pushing for a new government body to take over long term infrastructure investment decisions.
Again unsurprisingly, the focus of the Nationals policy revolves primarily around rural and regional areas.
One of the critical priorities which the Nationals wish to push is the ongoing Royalties for Regions program, which since 2008 has seen $6.1 billion invested into more than 3,600 rural and regional projects to boost infrastructure in terms of health, education, road and rail projects, tourism, agriculture and sporting facilities.
The Nationals say they oppose forced local council amalgamations and oppose any moves to privatise Freemantle Port unless there are guarantees about access on fair commercial terms for industry and regional users.