Housing Industry

The Hon. T.T. NGO (15:28): We all know that the housing industry is the backbone of our economy, creating thousands of jobs and generating billions of dollars in economic activity. Recently, another building company, Coast to Coast Homes, went under, which has left another 15 people without a job and 90 homes unfinished. This comes off the back of six other residential builders going under since November last year. Hundreds of jobs have been lost, many subcontractors have been left unpaid and many family homes left unfinished.

How can we fix this? Master Builders SA (MBSA) chief executive, Ian Markos, believes low population growth, reluctant bank lending, planning laws and inefficient land release have created a perfect storm. He said:

We need to turn this decline around, and we've had months and months on end with declining new home builds.

The MBSA has made a submission to the Marshall Liberal government, entitled Make Housing Great Again, and it has four main recommendations:

1. That stamp duty exemptions are put in place for first-home buyers. This could save a prospective homebuyer $15,000 to $20,000, along with the compounding cost of interest repayments.

2. That the compulsory requirement to have a rainwater tank installed for new dwellings be removed, as it is adding an unnecessary $5,000 cost to the price of a new home. Master Builders believe in freedom of choice. For example, this money could be spent on solar panels or on reducing the size of the mortgage instead.

3. That the SA Productivity Commission review all taxes and charges related to land and property development.

4. That the current First Home Owner Grant of $15,000 be increased to $20,000 in regional South Australia.

Both New South Wales and Victoria have implemented stamp duty exemptions for first-home buyers up to a purchase price of $600,000. The MBSA recommends that South Australia have a similar exemption, implemented at the current median house price in Adelaide of $470,000. The MBSA commissioned Hudson Howells to undertake modelling of various scenarios if a stamp duty threshold was implemented for first-home buyers. Even on its worst-case scenario with a threshold set at $470,000, it was found that there would be a net state government revenue gain of more than $17 million. Although more than $19 million dollars would be lost in stamp duty receipts, there would be an increase of more than $36 million in GST and payroll tax receipts.

The response to this submission by the Marshall government has been woefully inadequate. Treasurer Rob Lucas has said no to stamp duty cuts in this year's budget due to the reduction of GST revenue. At least the Treasurer does not have his head buried in the sand like his leader, Premier Steven Marshall, who has stated that there was a massive amount of construction happening in the state. He also said:

It doesn't mean to say that every single business in South Australia is going to be going through boom times, but we're satisfied that at the moment there is enough economic activity in this state.

This is all rather hypocritical of a government and political party that supposedly prides itself on taking the handbrake off small business and investment in this state. Certainly, that was how they talked in opposition, but now in government they are hiking up the fees and charges on essential services that will hurt the economy and ordinary South Australians.

All economic indications are that Australia and South Australia are facing a strong head wind. Even the RBA is concerned, cutting interest rates yesterday and indicating more rate cuts to come in coming months. The Marshall government needs to start listening to industry people, like Master Builders SA, to give the South Australian economy a boost by implementing its four recommendations immediately.