18 June 2024
Fiscally responsible budget, but at what cost to NSW residents?
- NSW budget delivers modest cost of living relief for households and businesses
- Freezing the land tax threshold could have repercussions on the rental market and reduce inward investment
- Treasurer Mookhey focuses on balancing the books, but will it pay off?
New South Wales Treasurer Daniel Mookhey handed down a fiscally prudent budget on Tuesday (June 18) – but at what long-term cost to the state’s residents?
With modest cost-of-living support compared to other states and the risk of raising rental costs for struggling households and businesses by increasing the number of property owners who pay land tax, the budget will be met with disappointment by many.
CPA Australia spokesperson Gavan Ord says the decision to freeze the state’s land tax threshold could have negative repercussions, but the government is limited in its options for increasing revenue.
“The budget seeks to strike a balance between balancing the books and limiting the negative consequences of such revenue raising,” said Mr Ord.
“It’s very plausible that freezing the land tax threshold will have a knock-on effect to renters as property owners pass on the extra cost. Some will also consider selling their investment, which would further reduce supply in the rental market.
“It could also make New South Wales a less attractive place to invest. We’ve heard stories of CPA Australia members encouraging clients not to invest in Victoria since the state’s dramatic changes to property and payroll tax last year. New South Wales may now be seen in a similar light.
“We’ll wait to see what impact the land tax changes will have on investment and investor confidence. It is a real concern that property tax changes are potentially making Australia’s two biggest cities less attractive for overseas investors who can pick and choose where to invest.
“As accountants, we obviously understand the need to balance the books. While it’s regrettable that more property owners are dragged into paying land tax, tough times call for difficult decisions.”
Mr Ord was left frustrated by the lack of measures in the NSW state budget to help support small businesses doing it tough.
“It's disappointing that this year’s budget did not include any significant measures to alleviate business costs and ease the regulatory burdens on businesses. While the budget had a strong focus on balancing the books, everyone in New South Wales stands to benefit from a budget where business was more at its centre.
“One positive is the government’s move to consult on a performance and wellbeing framework. Such a framework could help improve the measurement of the impact of policy decisions.
“If implemented effectively, this initiative could lead to policies that better contribute to a healthier business environment.”
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About CPA Australia
CPA Australia is Australia’s leading professional accounting body and one of the largest in the world. We have more than 173,000 members in over 100 countries and regions. Our core services include education, training, technical support and advocacy. CPA Australia provides thought leadership on local, national and international issues affecting the accounting profession and public interest. We engage with governments, regulators and industries to advocate policies that stimulate sustainable economic growth and have positive business and public outcomes. Find out more at cpaaustralia.com.au
Contact details:
Simon Downes, External Affairs Lead, simon.downes@cpaaustralia.com.au or 0401 461 503
