Housing Western Australians

Transcription

1 Housing Western Australians STATE ELECTION 2017 POLICY IMPERATIVES #waneedshousing Policy Actions to Support the Housing Industry January 2017

2 INDEX Foreword 3 About the Housing Industry Association 4 HOUSING INDUSTRY IN WESTERN AUSTRALIA 5 Economic backdrop 6 Overview 7 Overview: Policy initiatives 8 POLICY INITIATIVES FOR HOUSING 9 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: j.gelavis@hia.com.au T: HOUSING WESTERN AUSTRALIANS HIA STATE ELECTION 2017 POLICY IMPERATIVES

3 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/ 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 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

4 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

5 HOUSING INDUSTRY IN WESTERN AUSTRALIA HOUSING WESTERN AUSTRALIANS HIA STATE ELECTION 2017 POLICY IMPERATIVES 5

6 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. The challenging conditions affecting the state economy are at the root of the local residential 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. 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. WA Housing Starts Forecasts Thousand dwellings commenced FORECAST Source: HIA Economics /09 (a) 2009/10 (a) 2010/11 (a) 2011/12 (a) 2012/13 (a) 2013/14 (a) 2014/15 (a) 2015/16 (a) 2016/ / /19 Detached Multi 6 HOUSING WESTERN AUSTRALIANS HIA STATE ELECTION 2017 POLICY IMPERATIVES

7 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

8 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 Implement targeted incentives for businesses that take on 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 8 HOUSING WESTERN AUSTRALIANS HIA STATE ELECTION 2017 POLICY IMPERATIVES

9 POLICY INITIATIVES FOR HOUSING HOUSING WESTERN AUSTRALIANS HIA STATE ELECTION 2017 POLICY IMPERATIVES 9

10 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. 1REFORM OBJECTIVES: 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

11 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

12 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: WORK HEALTH 4AND 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

13 REFORM OBJECTIVES: EQUITABLE SUPPORT FOR CONSTRUCTION 5SKILLS Reform the Construction Industry Training Fund Levy to ensure the resource sector provides a fair contribution to support construction industry skills 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. 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. 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

14 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. 7 THE RESOURCE BOOM HAS DRAINED AWAY MANY SKILLED WORKERS FROM THE HOUSING INDUSTRY 14 HOUSING WESTERN AUSTRALIANS HIA STATE ELECTION 2017 POLICY IMPERATIVES 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.

15 8 9VET SUPPORTING GROUP TRAINING ORGANISATIONS TRAINING FUNDING IN THE SECTOR 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. 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

16 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. 16 HOUSING WESTERN AUSTRALIANS HIA STATE ELECTION 2017 POLICY IMPERATIVES NEW HOME CONSTRUCTION ALSO PLAYS A FUNDAMENTAL ROLE IN PROVIDING SHELTER FOR ALL, SOMETHING THAT SHOULD NEVER BE IGNORED

17 11 12 IMPROVE REMOVE COMPOUNDING STAMP DUTY ON NEW HOMES HOME WARRANTY INSURANCE 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. 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. 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. HOUSING WESTERN AUSTRALIANS HIA STATE ELECTION 2017 POLICY IMPERATIVES 17

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19 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. 14 SUPPORT FOR FIRST HOME BUYERS 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 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

20 #waneedshousing For further details please contact: John Gelavis, Regional Executive Director WA 22 Parkland Road Osborne Park WA 6017 E: T: