Sunday, 13 January 2013

Worth a look at again NSW Budget 2012-2013

NSW Budget 2012-2013

12 Jun 2012
Property Council
Property Council of Australia

Budget Brief 2012-2013

Executive summary

Treasurer Mike Baird has delivered a budget that recognises the economic dividend on offer from investing in the property sector.

A centrepiece of the Budget is the Building the Statepackage, which includes:
  • creation of Urbangrowth NSW – a new agency blending Landcom and the Sydney Metropolitan Development Authority to drive urban renewal and land release,
  • $13 million to fast track approvals for State significant projects and clearing the backlog of residual Part 3A projects awaiting determination,
  • building vital infrastructure to unlock new housing in a range of incentives totalling $561 million, and
  • redirecting financial incentives to new housing for first home owners and buyers of new properties (see details below).
Overall, the Budget is set to return to surplus in 2013-14. Here is a summary of the budget highlights:
F2011    (outcome)
F2012   (estimate)
Economic growth
Surplus / deficit
Infrastructure investment
Stamp Duty collected
Land Tax collected
*not including expected increase of ¾ upon introduction of Carbon Levy

  • Urbangrowth NSW will be created by the Government to drive investment in key locations in NSW, underpinning new urban renewal and land release sites. Urbangrowth NSW will integrate Landcom and the Sydney Metropolitan Development Authority as a new driver for housing and precinct delivery.
  • $13 million in additional resources to fast track the assessment of major projects, including residual Part 3A projects.
  • $481 million is dedicated to a Housing Acceleration Fund – investing in infrastructure needed to support housing across the state, especially in greenfield areas. $181 million is already allocated, with $300 million to follow from Property Asset Utilisation Fund proceeds.
  • $50 million to an Urban Activation Precincts Support Scheme – a fund to support councils’ infrastructure needs linked to new housing supply in key urban areas close to jobs and transport.
Other planning measures include:
  • $75 million through the Sydney Region Development Fund to acquire land for regional open space and transport corridors.
  • $5 million for the ongoing review of the planning system.
  • $5 million for implementing Growth Infrastructure Plans, engaging Release Area Delivery Managers and reviewing development contributions.
  • $2 million to resolve systemic planning impediments to housing supply, establish monthly reporting of dwelling completions and improve the feasibility of planning instruments.
  • $1 million to expand the exempt and complying development codes to include multi-unit housing and increasing the eligible scope of commercial and industrial developments.
  • $8 million to help councils finalise their LEPs.
Budget 12 grey tax icon
  • From 1 October 2012, First Home Owners Grant will increase to $15,000 for new houses. This will drop down to $10,000 from 2014. The current $7,000 FHOG will cease to apply on 1 October 2012.
  • Stamp duty exemptions for first home buyers will continue up to $550,000 in value, with a sliding scale up to $650,000.
  • $5,000 grant for all home buyers buying new properties from 1 July 2012 – titled the New Home Grant – replacing the older concessions from previous budgets.
  • The Government has committed to reviewing the highly inefficient Fire Services Levy and will release a discussion paper shortly.
Tax revenues and expenses:
  • Stamp Duty was higher than originally budgeted, with $5.376 billion collected as opposed to $5.219 budgeted (up 3%). Transfer duty is expected to continue rising until 2015-16 at an average rate of 11.4% per annum.
  • The Government has deferred its commitment to scrap marketable securities duty, mortgage and non-real property transfers duties until 1 July 2013.
  • Land tax for 2012-13 is expected to be $2.559 billion, up 8.1% from 2011-12. Land tax revenue is projected to increase by an average of 7.1% in the four years to 2015-16, reflecting expected increases in land values.
  • Payroll tax in 2012-13 is forecast to be $7.204 billion, rising by an average annual rate of 5.8% to 2015-16.
  • The 110% increase to the Parking Space Levy announced by the former Government in the 2008 mini-budget is to remain. This is estimated to raise $99 million in 2012-13.
  • The annual growth rate of expenditure to 2015-16 is forecast at 3.3%, less than the 3.9% expected increase in revenue over this period.
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Regional investment
  • Potential for Port Kembla to be included in the long-term leasing of Port Botany. Revenue resulting from the transaction will be earmarked for Restart NSW, with 30% earmarked for regional areas.
  • $100 million for infrastructure in the Illawarra, the spending of which will be determined by Infrastructure NSW later in 2012.
  • $845 million for the Hunter Expressway and ancillary works over the four years to 2015-16.
  • $120 million for the State Investment Attraction Scheme and Regional Industries Investment Fund, which included the Illawarra Innovation and Investment Fund, to drive regional growth and complement the Jobs Action Plan.
  • $3 million to implement the Upper Hunter and New England North West Strategic Regional Land Use Plans.
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  • Total budget spend in four years to 2015-16 will be $60.8 billion, $26 billion of which will be for transport and communications. In 2012-13, the $15 billion infrastructure budget includes a $6.1 billion spend for transport and communications spending.
  • $397 million for the South West Rail Link, with a total four year spend of $1.4 billion
  • $360 million for the North West Rail Link in 2012-13, with a total four year spend $3.3 billion
  • $116 million in 2012-13 for the Lilyfield to Dulwich Hill light rail extension with services planned to start by early 2014
  • $124 million in 2012-13 for the roll-out of the Opal ticketing system
  • $18 million to Infrastructure NSW to finalise the State Infrastructure Strategy and five year infrastructure pans, and manage the redevelopment of SICEEP
More 2012-13 infrastructure funding information:
  • $845 million for the Pacific Highway, including completion of the Ballina Bypass and Banora Point upgrade ($5 billion total to 2015-16)
  • $629 million for Hunter Region upgrades, including the Hunter Expressway.
  • $248 million for M2, M5 and F5 motorway upgrades, including building the Erskine Park Link Road.
  • $163 for the Princess Highway ($596 million total to 2015-16)
  • $104 million for Great Western Highway upgrades
  • $100 million for the Hume Highway, including Tarcutta and Woomargama Bypasses
  • $73 million for Central Coast improvements, such as widening the Central Coast Highway between Erina and Wamberal.
  • $95 million for Waratah rolling stock enabling works
  • $95 million for 140 new STA buses and 60 private operator buses, with another $32 million for new buses services
  • $22 million for capital improvements to the Sydney Ferries fleet and infrastructure
  • $85 million for the Northern Sydney Freight Corridor ($950 million total to 2015-16)
  • $35 million for the Port Botany expansion and $74 million for Enfield ILC
  • $42 million for the White Bay cruise passenger terminal
Budget 12 grey greening built environment button
Greening the built environment
  • $368 million for projects funded through the Climate Change Fund, including $220 million for Solar Bonus Scheme reimbursements, $53 million for energy efficiency and water saving programs and $49 million for clean energy supply programs.
Other sustainability measures include:
  • $19 million to help local councils prepare and carry out coastal, floodplain and estuary management plans.
BUdget 12 grey misc button
  • $57 million in 2012-13 to construct the Headland park at Barangaroo.
  • An additional $30 million for Local Infrastructure Renewal Scheme (on top of the $70 million already allocated).
  • $5 million for regulatory reform of areas such as strata and community title schemes.
  • The review of the land valuation process by Parliament’s Joint Standing Committee on the Office of the Valuer General will continue into 2012-13. Separately, Treasury is set to begin consultations shortly on enhancing the administration of land tax.