TASMANIAN ELECTION POLICY IMPERATIVES

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1 Housing Tasmanians TASMANIAN ELECTION POLICY IMPERATIVES ECONOMIC BACKDROP The housing industry is one of Tasmania s largest economic drivers, with construction work reaching $2.5 billion in , up by 3.3% from the year before. The Tasmanian construction industry continues to grow and confidence in Tasmania s economy strengthens. As at December 2016, the industry employed 21,300 an eight percent increase from 2015, and 22% increase from Over 80% of new house and renovation activity combined is built by Tasmanian owned and operated builders, trade contractors and service providers, thereby being a significant retained wealth creator for the state s economy.

2 FOREWORD PAUL BURNELL HIA President Tasmania Delivering new homes to provide quality and affordable shelter for all Tasmanians is the fundamental driver for the housing industry in Tasmania. The Housing Industry Association (HIA) supports home builders and building professionals working in our industry by highlighting to government the ongoing need to reduce red tape, invest in the future of the industry through training and to improve the time to bring new land and homes to market. As the state election approaches, it is critical that a future government sets out a clear agenda to support housing supply over the next decade. Tasmanians deserve a long term vision for housing supply and housing affordability that ensures first home buyers and those seeking to rent a home can access the homes they need, in the locations they desire, at a price they can afford. Housing Tasmanians sets out HIA s key policy imperatives that we believe deserve the support of an incoming government to assist the housing industry in Tasmania to achieve this goal. DELIVERING NEW HOMES TO PROVIDE QUALITY AND AFFORDABLE SHELTER FOR ALL TASMANIANS About HIA The Housing Industry Association (HIA) is Australia s peak residential building organisation, representing over 40,000 members nationally. Members include builders, trade contractors, manufacturers and suppliers, and associated building professionals. HIA provides members with information, advice and training, develops policies and advocates on behalf of the building industry. 2 HOUSING TASMANIANS ELECTION POLICY IMPERATIVES

3 POLICY IMPERATIVES To continue growth, Tasmania needs to build on its unique advantage over other states for business. The creation of an economic environment for new housing will enable future growth and sustainability within Tasmania. The following imperatives outline the policies and initiatives the HIA believe can make a difference for all Tasmanians. PLANNING REFORM HIA support the Tasmanian Planning Scheme and introduction of private certification and iplan/planning and Building Portal (PABP). HIA support a planning system which comes together to provide a streamlined approach, providing consistency and certainty for members and the building and construction industry in Tasmania. Tasmanian Planning Scheme The pending new single statewide planning scheme promises significant improvements, streamlining processes for planning approvals in Tasmania. The expedient implementation of the Tasmanian Planning Scheme is an imperative to remove the complexity of zones, design rules and processes across 29 local councils. It is of the utmost importance that the implementation process for the Tasmanian Planning Scheme retains industry consultation. The second stage of the process (Part B) to develop specific council local planning provisions needs to be appropriately managed, with opportunity for industry input. HIA calls on an incoming government to prioritise the completion of the Tasmanian Planning Scheme and ensure ongoing industry consultation. Private Certification Local government is continually challenged in attracting and retaining experienced planning staff. Certification in planning could be easily integrated into applications for routine items that still require planning approval (e.g. fences, single dwellings) leaving authorities better placed to deal with applications that require more detailed assessment and strategic consideration. The process to prepare a development application in accordance with existing state and local government design codes involves qualified building designers and other professionals, including private planning professionals. To assist local governments in managing the technical assessment of planning applications, HIA advocates for the introduction of planning certification in Tasmania. Legislation which would enable private sector involvement in the development assessment process already exists. HIA SUPPORT THE TASMANIAN PLANNING SCHEME, AN INTRODUCTION OF PRIVATE CERTIFICATION, AND IPLAN HIA calls on an incoming government to commit to introducing a framework for local councils to accept certification of development applications to verify compliance with relevant design codes. iplan/papb iplan and PABP offer a significant opportunity to streamline the planning process. The introduction of effective iplan and PABP systems will assist in cutting much of the red tape and speed up the planning process. The supply of relevant land and planning information via local government websites, coupled with an electronic lodgement process for development applications, will provide greater transparency and consistency across the state. HIA calls on an incoming government to commit to fund the implantation of iplan and PABP across all local government areas. HOUSING TASMANIANS ELECTION POLICY IMPERATIVES 3

4 REDUCTION OF GOVERNMENT LEVIES AND TAXES ON LAND AND NEW HOMES Stamp duty on house and land packages The Taxation and Grants Legislation (Housing Construction Amendments) Bill 2017, as currently drafted, should be amended to properly reflect the intent that stamp duty will only be paid on the value of the land for house and land packages. Land tax A reduction in land tax provides an opportunity to create a competitive environment for investing and would assist housing affordability. HIA call on an incoming government to repeal Section 19(2) and establish a new definition of consideration that reflects the stated intent from the 2017 State budget, including an express exemption for house and land packages. LAND SUPPLY AND AVAILABILITY STIMULUS FOR FIRST HOME BUILDERS The Housing Supply Side Options Project has identified key sites available for repurposing to increase the availability of supply. It will be important that these sites are made available to the private market as well for social housing. The lack of affordable land for first home builders needs to be addressed. By making some of the government s land available to the private market, land prices for first home builders could be supported. Ongoing support of first home builders is imperative to the continued growth of Tasmania s economy through growth in the residential building sector. HIA members have advised that for many first home buyers make up a high percentage of their enquiries and schemes such as the First Home Builders Boost are essential in ensuring people are able to get into the property market in Tasmania. HIA calls on an incoming government to retain the First Home Builders Boost for first home buyers building a new home. It is also essential to introduce changes to stamp duty and provide land tax relief for first home builders. This would go some way to incentivising first home buyers to build rather than buy an existing home, thus stimulating our economy. 4 HOUSING TASMANIANS ELECTION POLICY IMPERATIVES

5 RENTAL PRICE PRESSURES IN HOBART ARE NOW STRONGER THAN ANY OTHER CAPITAL CITY IN AUSTRALIA INITIATIVE FOR THE INCREASE OF RENTAL AVAILABILITIES AND INVESTMENT PROPERTIES Tasmania s rental market is currently under real strain the pace of rental inflation has accelerated to over 4 per cent, the highest since Rental price pressures in Hobart are now stronger than any other capital city in Australia and the city s rental vacancy rate is the lowest in the country. A functioning rental market is vital for underpinning living standards and facilitating growth in the Tasmanian economy. The current problems reflect the effects of years of underinvestment in the state s rental market. There are simply not enough investors active in the local market and consideration must be giving to enhancing the incentives around this. Potential measures might include: Reducing stamp duty and/or land tax on the first property bought by an investor Providing enhanced capital gains tax concessions on the sale of an investor s first investment property. HOUSING TASMANIANS ELECTION POLICY IMPERATIVES 5

6 6 HOUSING TASMANIANS ELECTION POLICY IMPERATIVES IT IS VITAL THAT OUR RETIRING SKILLED WORKFORCE BE ENCOURAGED AND SUPPORTED TO PASS THEIR SKILLS TO OUR FUTURE BUILDERS

7 TRAINING OUR SKILLED WORKFORCE Until 2016, there had been a decline in apprentices in the building and construction industry. There are currently 22,000 building related employees within Tasmania. It is estimated that at least 10% of this workforce should be in some form of training (i.e. apprentices) to create the path forward into the industry. Currently in Tasmania, we have around 1,500 apprentices well short of the target 2,200. This will have a compounding affect as our ageing population retire and the need for a skilled workforce is left short. It is vital that our retiring skilled workforce be encouraged and supported to pass their skills to our future builders/skilled tradespeople, and the foreseeable skills shortage be addressed. Apprentices Cost remains the principal factor influencing employment of apprentices. The direct and on-costs associated with employing an apprentice are difficult to pass onto a customer. Current Government incentives only go some way to subsidising the costs involved in training apprentices. Higher incentives for employers to take on apprentices should be available, particularly to cover training in the first two years which are considered to be the most costly to the employer. Currently first year apprentices (up to the age of 18 living at home) in building and construction receive less than the national minimum living wage. Businesses that take on the responsibility to train young apprentices and provide on the job training receive limited, to no, benefit in offering this training to young people. Making additional payments of wages in excess of the modern awards is extremely difficult for these small businesses. Drop-out rates amongst first year apprentices, particularly under the age of 18, could be significantly reduced if those apprentices were receiving an equivalent income to those receiving the minimum living wage ($ per week). This could be addressed by the introduction of an additional state funded topup payment for 1st year apprentices equivalent to the current allowance. An incoming government should introduce a wage subsidy for 1st year building apprentices under the modern award rates to ensure apprentices are paid the equivalent of the national minimum living wage and to support small business take on new apprentices. Career pathway planning HIA has developed a presentation to school aged students (year 8) focusing on the building and construction industry and the vast career opportunities it can present. The intent of this presentation is to encourage interest in the building and construction industry and demonstrate the variety of career pathways open to students whether it be through an apprenticeship and trade pathway, university or on-thejob training. HIA would seek an incoming government s support to expand this program and promote the benefits of entering the building and construction industry as a career. Registered Training Organisations (RTOs) It is integral to the success of our industry that the training of our future builders is administered by industry leaders, such as the HIA. An incoming government should promote the integrity of companies providing training in the building and construction industry in Tasmania by support experienced, recognised and long term industry based RTOs. INCREASE INFRASTRUCTURE EXPENDITURE LOCAL GOVERNMENT RESOURCES HIA support the incoming government s investment in infrastructure projects. Investment in infrastructure generates employment, leading to increased demand for housing and personal spending thereby continuing to support the Tasmanian economy. To facilitate economically viable land development at affordable costs, the imposition of minimal developer contributions must be retained. Developers need to be encouraged to develop and bring new land to market and a reduction of developer contributions will assist. Local government at times struggle to attract and retain a high qualify professional work force. Given the state framework for the application of planning and building services, HIA support the use of shared services amongst local government to ensure consistency and certainty is provided across Tasmania in the interpretation of regulations and the delivery of timely approvals and advice. A review of local government fees, forms, timeframes, and processes of all local government councils should also be undertaken to ensure a consistent approach for all be applied. An incoming government should commit to investigating shared services in planning and building approvals by local government, along with process reforms to reduce fees and time delays in dealing with councils. HOUSING TASMANIANS ELECTION POLICY IMPERATIVES 7

8 RED TAPE REDUCTION IN BUILDING Building approvals HIA support the ongoing revision of the Building Act 2016 to ensure that it remains relevant to the industry, with red tape reduction in mind, without compromising the intent of the legislation. Private certification for plumbing Whilst HIA notes that the government is currently considering the implementation of private certification for plumbing, and that the enabling legislation is in existence, HIA seeks the imposition of a process whereby plumbers are able to self-certify works on any single residence on a residential block as a priority. This would remove some of the pressures placed on councils which, in many cases, are experiencing significant delays due to resourcing issues in this area. HIA support the incoming government in setting industry benchmarks and providing relevant training to practitioners to ensure private certification is able to be implemented. Roof plumbing The requirement that all roof work is to be undertaken by a licensed roof plumber should be removed. Any works undertaken by a building contractor on a new build for a residence should be the responsibility of that builder. INCENTIVES FOR POPULATION GROWTH The housing industry, more than other industries, relies on population growth, whilst the state s economy relies on a healthy building industry. Population growth is the key to both a future healthy building industry and state economy. If Tasmania s population growth declines from the current 0.6 per cent growth rate, the Tasmanian residential building industry will struggle. Tasmania s forecast for around 2,400 homes per year will address the current population growth. If we want to increase our industry employment then a concerted effort needs to be made by the incoming government to ensure population growth is a key priority. HIA support outreaching to the wider nation to facilitate internal migration opportunities through media campaigns. HIA seeks a commitment to an aggressive population growth strategy targeting positive intrastate population growth and increased immigration intake. Over the year to June 2017, Tasmania accounted for just 0.6 per cent of net overseas migrants to Australia. Since the early 1980s, our state s share of the total has never exceeded 1.4 per cent. The adoption of an ambitious target of a 2 per cent share would be potentially transformative and might be achieved through visa incentives to live in Tasmania and tax breaks for newly arrived migrants. 8 HOUSING TASMANIANS ELECTION POLICY IMPERATIVES