Joint Statement - Labor's property taxes plunge construction sector into crisis

Joint Statement – Labor’s property taxes plunge construction sector into crisis

Jess Wilson, Shadow Minister for Finance

James Newbury, Shadow Minister for Planning

Thursday 4 July 2024

A new industry survey has revealed the Allan Labor Government’s nation-high property taxes have sapped confidence in Victoria’s construction sector to a low last reached during COVID-19 pandemic.

Today, the Property Council and Procore have released a construction industry survey which found:
• Victoria’s Confidence Index has fallen to 90, compared to a national figure of 106, a level not seen since COVID-19 lockdowns in September 2020.
• Victoria is now the only surveyed jurisdiction in the nation with a negative industry sentiment.
• Industry’s expectation for forward work has fallen to just 0.9 compared to 19 in New South Wales, 21 in Queensland, and 24 in South Australia.
• Victoria has the second worst perception of State Government management in terms of planning and managing growth.

These survey results are drawn from more than 530 construction firms and come as the Allan Labor Government has abandoned its promise to build 80,000 new homes each and every year for the next decade.

Furthermore, the recent State Budget confirmed $21.5 billion – nearly half of Victoria’s tax take – will be raised from property across 2024-25, including $7.8 billion in land tax, $10.1 billion in stamp duty, $1.49 billion in COVID debt levy on landholdings, $1 billion in fire services levy and $250 million in the growth area infrastructure contribution levy.

Despite this record tax take, Labor’s net debt will continue to grow to a record $187.8 billion by 2027-28, with daily interest repayments to reach almost $26 million over this same period.

Shadow Minister for Finance, Jess Wilson, said: “This survey reflects the damage a decade of financial mismanagement under Labor is having on Victoria’s residential construction sector.

“The Allan Labor Government’s nation-high property taxes are driving up housing and rental prices and pushing desperately needed investment interstate.

“Labor cannot manage money, cannot manage our construction sector and Victorians are paying the price.”

Shadow Minister for Planning, James Newbury, said: “Premier Jacinta Allan and the State Labor Government are killing the property sector with their tax assault.

“Hundreds of businesses have confirmed that the Victorian property industry is now in crisis.”

“Confidence in the sector is at a historic low, not seen since the middle of COVID lockdowns, when the industry was shut down.”

“Premier Allan can no longer ignore how damaged the industry is and how few new homes are projected to be built.”

Jess Wilson, Shadow Minister for Finance

James Newbury, Shadow Minister for Planning