Housing Western
Australians
STATE ELECTION 2017 POLICY IMPERATIVES
#waneedshousing
Policy Actions
to Support the
Housing Industry
January 2017
INDEX
Foreword3
About the Housing Industry Association
4
HOUSING INDUSTRY IN WESTERN AUSTRALIA5
Economic backdrop
6
Overview7
Overview: Policy initiatives
8
POLICY INITIATIVES FOR HOUSING9
Reforming planning and building laws
10
Cutting red tape
12
Training for a skilled future
13
A productive and growing economy
16
For further details on the Policy Imperatives, please contact:
John Gelavis, Regional Executive Director WA
22 Parkland Road Osborne Park WA 6017
E: [email protected] T: 0407 750 128
@HIA_WA
2 HOUSING WESTERN AUSTRALIANS – HIA STATE ELECTION 2017 POLICY IMPERATIVES
FOREWORD
DEAN O’ROURKE
President HIA WA
Heading into the WA state election, it feels
very different to the last. The 2013 election
ran through a period of a buoyant economy;
the housing industry growing to catch up
with the high levels of migration that came
with the booming mining sector. Record
home building numbers followed – more than
31,000 homes were built in WA in 2014/15.
2017 looks a lot different. The fall-off in investment
in the mining sector has seen population growth
decline and the general economy take a tumble.
The housing industry has not escaped. 2015/16 saw
home building numbers fall by nearly 20%, before
what we hope was hitting the bottom in late 2016.
We are a resilient industry and have reshaped to
suit the changing economic conditions. But there
are a few challenges that we have seen hamper our
efforts in meeting the housing demands of Western
Australians.
Affordability has been and will continue to be
the biggest challenge in home ownership. Yet
there are so many processes and taxes applied
to our industry that are simply inefficient. Stamp
duty doubles up on infill developments. Local
governments operate independently requiring our
industry to respond to varying interpretations of the
same rules. On top of that, they all have various
fees and charges that are applied without any
consideration on the overall impact to the home
buyer and the industry, when we are also juggling
regulation and state government fees and levies.
“
HIA CALLS FOR A COMMITMENT
FROM THE INCOMING STATE
GOVERNMENT TO HEAVILY
ENGAGE WITH THE HOUSING
INDUSTRY IN CONSIDERING
THESE POLICY IMPERATIVES
We fought to keep good tradespeople against the
lure of the mining sector, but now as that sector
has declined, we haven’t seen those who slipped
away return. We faced significant skills shortages
through that time, something that we all need to
be preparing to avoid in the future. Supporting
apprentices is crucial for keeping the housing
industry healthy in the long term. The challenge is
to keep up the training during the tougher times.
A potential government can do a lot to keep the
housing industry healthy by addressing those
key challenges. Supporting and implementing
full private certification will prevent bottlenecks
and reduce the burden of local government
inconsistencies. The savings will be real for the
consumer – a massive plus for affordability.
Providing incentives for apprentices and support
of our training organisations will make sure we
are building the industry for the future. The Policy
Imperatives HIA have developed look to address
those areas that government can contribute
towards improving – for the housing industry,
consumers and the economy at large.
HIA calls for a commitment from the incoming
State Government to heavily engage with the
housing industry in considering these Policy
Imperatives. They have been developed through
HIA’s committee structure, drawing on member’s
input from across the state, and are solution
focused – we will help you get it done.
Thoughtfully implemented, these imperatives
can deliver a more robust and efficient housing
industry, to the benefit of the whole state.
HOUSING WESTERN AUSTRALIANS – HIA STATE ELECTION 2017 POLICY IMPERATIVES 3
ABOUT THE HOUSING INDUSTRY ASSOCIATION
THE HOUSING INDUSTRY ASSOCIATION (HIA) IS AUSTRALIA’S PEAK RESIDENTIAL BUILDING
INDUSTRY ORGANISATION, REPRESENTING OVER 40,000 MEMBERS NATIONALLY.
HIA is the only national industry association with
membership covering all building professionals
across the residential construction sector.
Members include builders, trade contractors,
manufacturers and suppliers, and building design
professionals.
The highly recognisable HIA logo is proudly
displayed as a badge of professionalism on
building sites across Australia.
The housing industry has built an inventory of over
9 million houses and apartments across Australia,
putting over 350,000 people in new homes each
year.
The industry also supports a thriving renovation
market to upgrade that housing stock, which
enhances amenity for residents, improves energy
efficiency and provides greater access for an
aging population.
Residential construction is worth around $150 billion
to the Australian economy each year and there are
over one million people employed across all types of
construction.
HIA develops and advocates policy on behalf of
members to further advance new home building and
renovating, enabling members to provide affordable
and appropriate housing to the growing Australian
population. New policy is generated through a
grassroots process that starts with local and regional
committees before progressing to the National Policy
Congress by which time it has passed through almost
1,000 sets of members’ hands, with real life industry
experience and knowledge.
Policy development is supported by an ongoing
process of collecting and analysing data,
forecasting, and providing industry data and insights
for members, the general public and governments.
4 HOUSING WESTERN AUSTRALIANS – HIA STATE ELECTION 2017 POLICY IMPERATIVES
HOUSING INDUSTRY IN
WESTERN AUSTRALIA
HOUSING WESTERN AUSTRALIANS – HIA STATE ELECTION 2017 POLICY IMPERATIVES 5
“
WA’S RESIDENTIAL BUILDING
INDUSTRY (AND THE WIDER
ECONOMY) WILL BENEFIT
FROM ANY MEASURES TO
STIMULATE DEMAND
”
building industry’s problems. The unemployment
rate in WA has increased from 3.5 per cent in
mid-2012 to 6.9 per cent in November 2016, with
total employment down by 1.2 per cent over the
past year. The deterioration of the labour market
means that inward migration to WA from overseas
has almost dried up and the state is now leaking
residents to other states. The implications of this
for housing demand are obvious.
HIA expects that new dwelling starts in WA will
decline by a further 22.2 per cent during 2016/17
to a level of just 19,839 – some 37 per cent lower
than the 2014/15 peak. A modest recovery is
anticipated to begin in 2017/18.
ECONOMIC BACKDROP
New home building activity in WA is currently
struggling – new dwelling starts are estimated to
have fallen by 19.3 per cent to 25,498 in 2015/16.
This compares with the all-time high of 31,578
starts reached during the previous financial year.
The difficulties for new home building in WA are
in contrast to the national picture, with 2015/16
representing the strongest year on record for new
dwelling commencements across Australia and
activity remaining very elevated in 2016/17.
With WA’s annual housing requirement estimated
at about 35,000 over the long term, the key policy
challenge is to ensure that housing shortages do
not accumulate over the next few decades. Supply
conditions need to become more favourable from
the point of view of delivering more new housing in
WA and this means reducing the very onerous tax
burden on new home building and creating more
efficient approvals processes.
In addition, WA’s residential building industry
(and the wider economy) will benefit from any
measures to stimulate demand. The recent
retention of first home buyer incentives is
consistent with this, as is safeguarding the longterm viability of the Keystart programme.
The challenging conditions affecting the state
economy are at the root of the local residential
WA Housing Starts Forecasts
22.9
Thousand dwellings commenced
20.1
FORECAST
23.5
18.8
20.0
18.0
17.1
15.0
14.9
10.0
8.1
5.7
5.4
5.0
0.0
3.9
3.7
2008/09 (a)
2009/10 (a)
2010/11 (a)
6.5
7.5
4.9
3.1
2011/12 (a)
2012/13 (a)
Detached
2013/14 (a)
2014/15 (a)
Multi
6 HOUSING WESTERN AUSTRALIANS – HIA STATE ELECTION 2017 POLICY IMPERATIVES
16.9
16.1
15.0
14.7
Source: HIA Economics
25.0
2015/16 (a)
2016/17
4.5
2017/18
4.9
2018/19
OVERVIEW
Shelter is a basic human necessity. Without
access to housing, families and individuals are
denied the opportunity to contribute to society to
their true social and economic potential. Housing
is the bedrock upon which all other aspects
of society are built – from health, education,
employment and economic contribution, to
community engagement, social interaction and
personal development.
Home ownership has and continues to be the
preferred form of housing for the great majority of
Western Australians. Yet home ownership rates are
declining, and for too many Western Australians,
it has become an unachievable dream. Inevitably,
these ‘otherwise would-be’ owner-occupiers move
into and remain in private rental properties, placing
additional upward pressure on rental prices.
Western Australia has seen the decline of the
resource investment boom take hold in recent years.
New home building is a key sector in ensuring an
orderly and successful transition for the Western
Australian economy away from a disproportionate
reliance on resources-related investment.
Without policy incentives and reform to
compliment the currently low interest rates, new
home building activity will be unable to fill the gap
left by declining resources-related investment. We
have already seen the impact of declining home
construction numbers on the state economy. An
incoming government needs to be prepared to do
what is necessary to prevent any further falls in
building activity, which will flow onto other parts of
the State’s economy.
Red tape and delays in planning and building
approvals, business administration and new and
escalating/progressive fees, taxes and charges head
the list of costs and constraints that are inhibiting
the supply of new homes and limiting employment
creation opportunities.
Independent economics analysis demonstrates that a
1 per cent productivity improvement in home building
through reductions in inefficient taxes or improved
approvals timeframes would see an increase in
economic activity in Western Australia of about $120
million per year. The flow on impact is estimated to
be $4.85 of additional Gross State Product for every
increased dollar of activity in housing construction.
Continuing support of first home buyers is critical
for ensuring the housing industry and Western
Australian economy are capable of bouncing back
from the falls we have seen in recent years. The
recent decision to retain and increase the First Home
Owners Grant provided welcome assistance for this
sector of the market.
In times of market contractions, investment in the
training and development of the future trades and
builders of our industry becomes commercially
restrictive. Government needs to support the
continuing development of the housing industry to
ensure its long term success and ability to rebound
in times of plenty.
The following policy imperatives are solution focused
and seek to contribute to the long term viability of the
residential building industry and the state economy
by supporting the delivery of a sustainable supply of
housing in all forms for Western Australians.
This election presents an important opportunity for
all parties to invest in the future of Western Australia
by supporting the housing industry.
HOUSING WESTERN AUSTRALIANS – HIA STATE ELECTION 2017 POLICY IMPERATIVES 7
OVERVIEW: POLICY INITIATIVES
CERTIFICATION OF
BUILDING APPROVALS
Introduce a competitive market for building
permit approvals which incorporates a full
private certification model
CONSISTENCY AND CERTAINTY
FROM LOCAL GOVERNMENT
Ensure consistency throughout in the
interpretation and application of state planning
policy and regulations
RATIONALISE BUSHFIRE
PROTECTION REGULATIONS
Reduce the burden of bushfire protection
regulations on existing zoned land by excluding
urban areas from being considered bushfire prone
WORK HEALTH
AND SAFETY
Retain existing work health and safety laws for
the residential building industry
EQUITABLE SUPPORT FOR
CONSTRUCTION SKILLS
Reform the Construction Industry Training Fund
Levy to ensure the resource sector provides
a fair contribution to support construction
industry skills
IMPROVE INCENTIVES
FOR APPRENTICES
Provide incentives to support ongoing
apprenticeships in residential building through:
• exemptions for employers’ workers
compensation premiums, and
• subsidised work related vehicle registration
charges
SUPPORTING ADULT
APPRENTICES
SUPPORTING GROUP
TRAINING ORGANISATIONS
Increase funding for group training
organisations in building and construction
TRAINING FUNDING IN
THE VET SECTOR
Industry Registered Training Organisations
(RTOs) must be given preference for funding
for industry specific training programs
MONITORING COSTS ON
NEW HOME CONSTRUCTION
Establish a body to review any regulations,
levies, fees and charges proposed by
state and local government and order an
assessment of their impact on new home
construction
REMOVE COMPOUNDING
STAMP DUTY ON NEW HOMES
Introduce input credits for stamp duty on
transactions involving land development and
builders stocks for new home construction
IMPROVE HOME
WARRANTY INSURANCE
Implement a market based, prudentially
underwritten and last resort insurance
scheme for new home completions
SUPPORT FOR NEW HOME
BUYERS THROUGH KEYSTART
Improve the long term viability of Keystart
for first home buyers
SUPPORT FOR FIRST
HOME BUYERS
Retain the first home owners grant & stamp
duty concessions for new home construction
Implement targeted incentives for businesses
that take on adult apprentices
8 HOUSING WESTERN AUSTRALIANS – HIA STATE ELECTION 2017 POLICY IMPERATIVES
POLICY INITIATIVES
FOR HOUSING
HOUSING WESTERN AUSTRALIANS – HIA STATE ELECTION 2017 POLICY IMPERATIVES 9
Reforming planning
and building laws
The systems that manage the approval
of land for residential development and
the design and construction of new
communities and homes are a fundamental
part of doing business for the housing
industry.
When the planning and building systems fail
to offer a consistent process across local
governments, there is a direct impact on the
cost of new homes. When these systems
become complex and onerous, residential
projects are delayed and sometimes
abandoned. Rather than supporting housing
supply, the processes impede project
approvals and add costs that are passed
onto new home buyers.
REFORM OBJECTIVES:
1
CERTIFICATION
OF BUILDING
APPROVALS
Introduce a competitive market for
building permit approvals which
incorporates a full private certification
model
Government should extend the approvals
process improvements made in the 2011 Building
Act by providing for full private certification. The
partial private certification model has left local
councils with significant discretion and the ability
to interfere, recheck and delay what should on
paper be a short approval process.
Authorising a private building surveyor to
issue the building permit and approve R-Code
variations will create a competitive environment,
reducing approval timeframes and providing
commercial opportunity. Once issued, the
building permit would be submitted to council
for their records only. A similar change should be
made to the legislation to cover the occupation
of single dwellings.
10 HOUSING WESTERN AUSTRALIANS – HIA STATE ELECTION 2017 POLICY IMPERATIVES
2
CONSISTENCY
FROM LOCAL
GOVERNMENTS
Ensure consistency throughout in the
interpretation and application of state
planning policy and regulations
Removing the requirement for planning approval
for R-Code compliant homes was a significant
reform for the housing industry and for new
home buyers. This change will eventually lead to
considerable time savings for dwelling approvals.
However since the reform was introduced
it appears local governments are relying on
inconsistencies in the interpretation of local and
state planning policies as a reason to request a
planning approval for new dwellings.
Direction from the State Government is required
to ensure that all local governments are
appropriately applying the legislation in relation to
R-Code compliant home designs.
Inconsistent and wide-reaching local planning
policies are also being used by local government
to vary the requirements of the R-Codes in
ambiguous and subjective manners. Government
needs to establish control over the adoption of
these policies to ensure that consumers have
certainty in the application of the R-Codes and
the housing industry has certainty when entering
into negotiations with clients.
Appropriate direction and legislative changes are
required to ensure that the housing industry can
deliver all forms of new housing, in accordance
with the metropolitan planning strategies, in an
affordable and consistent manner.
“
WHEN THE PLANNING AND
BUILDING SYSTEMS FAIL
TO OFFER A CONSISTENT
PROCESS ACROSS LOCAL
GOVERNMENTS, THERE IS
A DIRECT IMPACT ON THE
COST OF NEW HOMES
”
3
RATIONALISE
BUSHFIRE
PROTECTION
REGULATIONS
Reduce the burden of bushfire protection
regulations on existing zoned land
by excluding urban areas from being
considered bushfire prone
Planning and building regulations introduced in
2016 to reduce the risk from bushfires to new
homes have improved the level of safety for
many future homes that are subject to bushfire
risk. However there have been a number of
instances where existing zoned residential lots
in urban settings have been identified as highly
bushfire prone, requiring increased inclusions and
construction standards for the proposed homes.
These proposed homes are immediately adjacent
to homes which have no bushfire protection
mechanisms, in areas where current or future urban
development will significantly reduce the bushfire
hazard.
The treatment of these homes has become
disproportionate with the likely risk and inequitable
for future home owners.
Bushfire management tools should be amended to
include alternative bushfire protection options for
these lots to ensure a reasonable balance between
construction costs and actual bushfire safety. The
exclusion of residentially zoned land in urban areas
from risk mapping would provide an appropriate
balance between existing and new home owners.
HOUSING WESTERN AUSTRALIANS – HIA STATE ELECTION 2017 POLICY IMPERATIVES 11
Cutting red tape
Regulations impose costs, barriers and
administrative burdens on business,
particularly the delivery of affordable
housing.
While there has been a focus in recent
years to harmonise many areas of
regulation, the productivity gains from
these reforms can be easily lost if they
effectively translate into the general
adoption of the most complex and
intrusive regulations merely for the sake
of consistency.
REFORM OBJECTIVES:
4
WORK HEALTH
AND SAFETY
Retain existing work health and safety
laws for the residential building industry
The Work Health and Safety ‘Green Bill’ introduced
by the Government in 2014 for the purpose of
harmonising Western Australian laws with the
national model workplace health and safety regime
agreed to in 2008 should not proceed.
The majority of residential construction
businesses that operate in Western Australia are
small businesses. They do not operate across
state boundaries and are unlikely that they will
experience any great advantage from harmonised
laws.
If the national framework was introduced in
Western Australia, it would impose unnecessary
additional cost, red tape and regulation upon
small businesses in the housing industry and other
sectors, yet would fail to make any significant
improvements for safety in the residential building
industry.
Rather these businesses will experience costs
and impacts related to changing their safety
systems and processes (including training) in order
to comply with the new requirements imposed.
Many businesses will pass on these costs to their
consumers. This will have a large effect on housing
affordability.
As extensive analysis released by the Victorian
government for that state indicated, the national
work health and safety scheme imposes costs on
businesses that are in excess of the benefits of
harmonisation.
Any reforms to the current work health and safety
laws operating in Western Australia must be based
on sound evidence that changes are required in
a local context. The reforms should not proceed
solely for the purpose of national harmonisation
if no net benefit to the state’s housing industry or
new home buyers can be shown.
12 HOUSING WESTERN AUSTRALIANS – HIA STATE ELECTION 2017 POLICY IMPERATIVES
REFORM OBJECTIVES:
5
EQUITABLE
SUPPORT FOR
CONSTRUCTION
SKILLS
Reform the Construction Industry
Training Fund Levy to ensure the resource
sector provides a fair contribution to
support construction industry skills
The decline in recent years in the number of
apprentices in training for building trades is a major
concern for the building industry and the Western
Australian economy generally. Additional funding
is required to ensure the ongoing upskilling of all
construction industry members is maintained.
The current exemption for engineering projects
by the Mining and Resource Industry from
contributing to the Construction Industry Training
Fund Levy is unfair and inequitable. The resource
sector ‘borrows’ many skilled tradespeople from
the construction sector during boom periods and
many do not return to the sector in times of a
downturn. This places pressure on training for new
entrants to the construction industry, including
residential building.
Training for a
skilled future
In many ways housing is a unique industry, in
that its products are generally hand built by
skilled tradespersons in an infinitely variable
workplace, and there is very limited ability to
substitute industrial processes and unskilled
labour for skilled trades.
The resource boom has drained away many
skilled workers from the housing industry
and despite coming to an end, not all will
return to this sector.
The housing industry should be seen as a
career pathway, taking a person through
an apprenticeship and learning technical
skills, to gaining experience and business
understanding that enable and empower
them to establish their own business. In
their later career years, industry leaders
and mentors should be encouraged and
supported to remain involved in the industry
to share their knowledge and develop the
industry of the future.
Withdrawing the current exemption that applies to
engineering construction projects in the resource
sector and applying a tiered levy based on project
value, which can be capped, would ensure
that the resource industry makes a responsible
contribution to the training of the workers it
employs and support the ongoing development of
the construction industry in Western Australia.
“
HOUSING IS A UNIQUE
INDUSTRY ... THERE IS
VERY LIMITED ABILITY TO
SUBSTITUTE INDUSTRIAL
PROCESSES AND
UNSKILLED LABOUR FOR
SKILLED TRADES
”
HOUSING WESTERN AUSTRALIANS – HIA STATE ELECTION 2017 POLICY IMPERATIVES 13
REFORM OBJECTIVES:
6
IMPROVE
INCENTIVES FOR
APPRENTICES
Provide incentives to support ongoing
apprenticeships in residential building
through:
• exemptions for employers’ workers
compensation premiums, and
• subsidised work related vehicle
registration charges
An apprentice is a worker under training and their
productivity will inherently be lower than that of a
fully trained and experienced worker. Employers
who take on apprentices provide a significant level
of support for the housing industry and supplement
government and private training schemes with
much needed mentoring and ‘hands on’ training for
young workers. Much of this training is provided
with little return to the business in the short term,
but generates a long term benefit for the housing
industry and hence the broader economy.
Apprenticeship policies need to provide
appropriate incentives for small businesses to
consider the employment of an apprentice and
counteract the lower productivity.
Exempting the wages of apprentices from an
employers’ workers compensation premium
calculation would provide support to businesses
taking on apprentices.
Direct support for apprentices should also be
provided. Reducing the 12-month car registration
and Transport Accident Charge renewal fee by
50% would help trade apprentices using their
car for work to meet their cost of living whilst on
apprentice wages. This is an incentive that comes
at relatively little cost to government but would be
a significant incentive for attracting apprentices to
the industry.
“
THE RESOURCE BOOM HAS
DRAINED AWAY MANY
SKILLED WORKERS FROM
THE HOUSING INDUSTRY
”
7
SUPPORTING
ADULT APPRENTICES
Implement targeted incentives for
businesses that take on adult apprentices
Under the building and construction modern
awards, there is a significant financial difference for
businesses taking on adult apprentices, aged 21
years or older.
An adult apprentice is paid the full adult labourer
rate, whilst younger apprentices are paid a
percentage of the relevant tradesperson rate.
Generally, the cost of taking on a 1st year adult
apprentice is twice the equivalent cost of taking on
an apprentice aged under 21. Throughout the life
of the apprenticeship the difference in wages to an
employer could be greater than $30,000.
Whilst there have been some modest federal
government measures to subsidise the
employment of apprentices aged 25 and over, no
equivalent subsidy is in place for workers aged
between 21 and 25. Workers in this age group
represent a cohort that brings job readiness and
life and work experience, but for wage reasons
they are simply uncompetitive under the current
employment arrangements.
Targeted subsidies or incentive payments for
businesses choosing to take on adult apprentices
aged 21 and over should be introduced,
particularly in the first and second years when the
wage gap is greatest.
14 HOUSING WESTERN AUSTRALIANS – HIA STATE ELECTION 2017 POLICY IMPERATIVES
8
SUPPORTING
GROUP TRAINING
ORGANISATIONS
Increase funding for group training
organisations in building and construction
Group training organisations (GTOs) play an
important role in the residential building industry
providing an essential source of workforce
development and training.
The model provides flexibility for both the
apprentice and the employer by providing
mentoring support and exposing an apprentice
to a diversity of work opportunities. These
organisations offer apprentices a safety net with
a network of host trainers available to ensure
they experience limited gap periods throughout
their apprenticeship. However the cost base is
higher than for businesses with directly indentured
apprentices due to the mentoring and the human
resource support systems that are in place.
Existing funding and incentives for group training
organisations is very limited and in recent years
there has been a reduction in Commonwealth
support which has significantly impacted on the
viability of the GTO training model for apprentices.
The building and construction industry relies
heavily on GTO schemes in Western Australia.
Therefore support for the ongoing operation of
GTOs in Western Australia as a viable training
option is needed.
9
TRAINING
FUNDING IN THE
VET SECTOR
Industry Registered Training Organisations
(RTOs) must be given preference for funding
for industry specific training programs
HIA supports a Vocational Education and Training
(VET) funding framework that places a high priority
on industries that rely on VET qualifications as a
means of verifying critical skills and competencies for
business and occupational licensing prerequisites.
There are many industry led RTOs operating in
Western Australia that offer a range of high quality
training and education services. These organisations
are underpinned by specific knowledge and expertise
in the operation and functions of their relevant
industry sector and are motivated by providing their
industry with the skills they need to succeed. They
are able to provide high quality training courses with
industry expert trainers at a competitive rate.
A successful funding framework for vocational
education and training must be based on an open
and competitive market place that treats all training
providers the same way regardless of public or
private ownership. An open and competitive market
allows the user a choice of the course and training
provider, without limiting their access to Government
funding. In simple terms, the funding is attached
to the student rather than the Registered Training
Organisation (RTO).
HOUSING WESTERN AUSTRALIANS – HIA STATE ELECTION 2017 POLICY IMPERATIVES 15
A productive and
growing economy
The housing industry has a proven record in
driving economic growth.
The reduction in economic growth
from resources has placed pressure on
governments to stimulate and support
other sectors of the economy to deliver
new productivity and growth. The housing
industry makes a significant contribution to
the Western Australian economy. New home
construction also plays a fundamental role
in providing shelter for all, something that
should never be ignored.
HIA advocates policies that will enable the
housing industry to deliver land and housing
to meet the needs of all Western Australians,
by sustaining a highly productive, competitive
and diverse housing sector.
REFORM OBJECTIVES:
10
MONITORING
COSTS ON
NEW HOME
CONSTRUCTION
Establish a body to review any regulations,
levies, fees and charges proposed by
state and local government and order an
assessment of their impact on new home
construction
New home construction remains one of the most
heavily taxed sectors of the economy, which directly
impacts on the affordability of both new and existing
homes. Research shows that 41 per cent of the cost
of a new home in Perth is made up of a fee, tax or
levy.
On virtually any basis of measurement, the
taxation burden borne by the housing industry is
disproportionately large. This is the direct result
of the cumulative impact of changes to regulation
without oversight between state agencies and
across local governments.
In recent times new home building has been the
subject of extraordinary increases in levies, charges
and bonds via state agencies including the Building
Services Levy and Landfill Levy. However there
have also been new and increased charges by local
governments without any cost/benefit analysis or
impact assessment being made on the impact to
new home construction and housing affordability.
The establishment of a body responsible for
reviewing changes to existing legislation, the
introduction of new charges or increases in existing
charges by state and local governments would
provide an opportunity to ensure the cumulative
impacts and the reasonableness of the costs applied
are considered.
“
NEW HOME CONSTRUCTION
ALSO PLAYS A FUNDAMENTAL
ROLE IN PROVIDING SHELTER
FOR ALL, SOMETHING THAT
SHOULD NEVER BE IGNORED
16 HOUSING WESTERN AUSTRALIANS – HIA STATE ELECTION 2017 POLICY IMPERATIVES
”
11
REMOVE
COMPOUNDING
STAMP DUTY
ON NEW HOMES
Introduce input credits for stamp
duty on transactions involving land
development and builders stocks for
new home construction
The supply of new housing in Western Australia
is currently impacted by the double-dipping of
stamp duty on transactions where subdivision
or construction occurs before the sale to the
new home buyer. This double-dipping creates
a disincentive for any housing development in
which there is land component, being a house,
apartment or even just a sub-divided block of
land.
When a builder or developer buys land for
housing stamp duty is paid on the transfer.
When the housing development is completed
on that land, the home buyer is then required
to pay stamp duty on the combined costs
of the new home and land which include the
embedded stamp duty from the first purchase.
This double-dipping of stamp duty directly adds
to the cost of new home construction.
12
IMPROVE
HOME
WARRANTY
INSURANCE
Implement a market based, prudentially
underwritten and last resort insurance
scheme for new home completions
With housing market conditions deteriorating,
Western Australia has experienced some home
building businesses face insolvency, highlighting
the benefits of compulsory home warranty
insurance as the best support for consumers
when a building contract cannot be completed.
The State Government has been underwriting
the operation of the home warranty scheme
in Western Australia for some time. This is not
the preferred approach. A viable market based,
prudentially underwritten scheme should be
reintroduced to reduce the risk for government
and provide appropriate protection for consumers
to ensure their homes can be completed should
problems arise.
By allowing an input credit for the developer or
builder on stamp duty paid on the initial land
purchase, the sale price of the end product
can be reduced proportionately. Duty paid
on the final sale price of new housing would
continue to make a significant contribution to
state revenue.
HOUSING WESTERN AUSTRALIANS – HIA STATE ELECTION 2017 POLICY IMPERATIVES 17
18 HOUSING WESTERN AUSTRALIANS – HIA STATE ELECTION 2017 POLICY IMPERATIVES
REFORM OBJECTIVES:
13
SUPPORT
FOR NEW
HOME BUYERS
THROUGH
KEYSTART
Improve the long term viability of
Keystart for first home buyers
One of the largest challenges facing first
homebuyers today is their ability to save a
deposit when faced with the significant expense
of rent. With ongoing changes to lending policies
and assessment rules by main stream lenders
this challenge has become even greater in recent
years.
Since 1989, Keystart has been vital in assisting
many West Australians, especially low to
middle income earners and first homebuyers,
achieve their goal of first home ownership.
The ongoing endorsement of Keystart by
successive governments over almost 3 decades
is applauded by the residential building industry
and reflects the importance of the scheme in the
housing market.
Retaining and developing policy settings
supporting the ongoing viability of Keystart is
essential for increasing levels of homeownership
in Western Australia.
“
HIA ADVOCATES POLICIES
THAT WILL ENABLE THE
HOUSING INDUSTRY
TO DELIVER LAND AND
HOUSING TO MEET
THE NEEDS OF ALL
WESTERN AUSTRALIANS,
BY SUSTAINING A
HIGHLY PRODUCTIVE,
COMPETITIVE AND
DIVERSE HOUSING SECTOR
”
14
SUPPORT FOR
FIRST HOME
BUYERS
Retain the first home owners grant &
stamp duty concessions for new home
construction
The First Home Owners Grant and Stamp Duty
concessions for new home construction has
made a significant contribution to the ability of
first home buyers to enter the private housing
market and move out of both public and private
rental housing.
The retention of these policies is essential
to continue to make the dream of first home
ownership achievable for more Western
Australians. Ensuring the appropriate support for
first home buyers is retained reduces pressure
on public housing waiting lists and assists in
reducing pressure on private rental prices in the
long term.
HOUSING WESTERN AUSTRALIANS – HIA STATE ELECTION 2017 POLICY IMPERATIVES 19
#waneedshousing
#waneedshousing
For further details please contact:
John Gelavis, Regional Executive Director WA
22 Parkland Road Osborne Park WA 6017
E: [email protected] T: 0407 750 128
@HIA_WA