Hold onto your hats – the real fun’s about to start. ScoMo will announce today that we’re going to the polls on May 18. That means for the next five weeks, the public service will be in caretaker mode, and Clive Palmer will be clogging every media channel his $50 million ad buy can grab a piece of.
It’s a good day for the government to be calling a poll. It coincides with Westpac-Melbourne Institute Leading Index figures showing that in the next three to nine months, we’ll be seeing an economic shot in the arm courtesy of the boost in consumer confidence stimulated by the budget announcement. Post-budget sentiment was 7.7 per cent higher compared to the previous week – which according to Westpac chief economist Bill Evans was “the most positive turnaround since we began tracking in 2011.”
This new-found optimism is not before time. Weaker-than-expected first quarter growth has prompted the ANZ Property Council Survey to declare that eastern seaboard property industry sentiment has hit a six-year low – giving Property Council CEO Ken Morrison plenty of ammunition to fire up the ol’ guns aimed at Labor’s proposed negative gearing and CGT changes. “It’s a bad time to be making risky changes to negative gearing and capital gains tax policies.”
Not to be outdone on the “things are shit” studies, NAB has released historic data comparisons showing the relative impact of the property downturn. Spoiler alert: when you can compare current price drops to those suffered during the great depression, you know it’s going to look pretty grim. The big danger is the impact of this trend on household wealth levels which, according to NAB, has fallen 12 per cent in real terms from the end of 2017 peak. This is also why we’re seeing a downward trend in new apartment project starts.
With this as our backdrop, consider Chris Bowen’s refusal yesterday to consider the possibility Labor’s sums on negative gearing are wrong. They’re already measuring up the drawing room in The Lodge and picking new drapes; the stated intention is to bring Parliament back as quickly as possible to rush in their suite of tax changes in time for July 1 2019.
This could be good news in-part for builders of new property if Labor sticks to its guns on NGT and CGT changes, but not so good for middle Australia. The Centre for Independent Studies mused yesterday that middle-income earners are going to be significantly worse off if the new mob’s proposed tax changes become law.
Given the class warfare and anti-business sentiment being pedalled in Canberra at the moment, you have to admire the Business Council of Australia chief exec Jennifer Westacott’s hutzpah. It is flying against the zeitgeist in spruiking a focus on productivity, not mandated wage floor growth, saying application of its proposals would add $40,000 to average incomes. The catch: it’d require Labor to about-face on pretty much its entire election platform.
Not everyone’s having a tough time at the moment. If you get a party invitation from developer Tim Gurner, for example, take it; he’s flogging $320 million worth of luxury St Kilda apartments in his St Moritz project – mostly to local downsizers – and reckons he’s getting better debt structures and is having no trouble pulling a crowd.
Cbus Property and Scentre Group aren’t letting frowns get them down either. The super team has lodged a DA to redevelop David Jones’ men’s store building on Market Street in Sydney into a $300 million retail, residential and office tower.
Merc Capital’s proposed twin projects in Norwest reported yesterday has hit a bit of a pollie-shaped snag, with Liberal MP David Elliot campaigning loudly to stop it at all costs. He’s got the Hills Shire Mayor Michelle Byrne on his side as well, apparently – which adds up to a potentially lengthy and messy DA process for the plucky MC.