Government’s third-strike confirms property needs a dedicated portfolio
Date: 5 Oct 22
Opinion Editorial published in the Herald Sun on 4th October 2022
By Quentin Killian, CEO Real Estate Institute of Victoria
The health of the property sector is essential to the quality of life for all Victorians. But without good government policy the entire sector is at risk.
Last week the government shared a press release announcing a $4 million spend of tax-payer money on a real estate underquoting taskforce. As ill-conceived and unnecessary as this is, it unfortunately presents as a third-strike for the Government when it comes to property sector regulation.
Let’s replay the swings and misses. Up first is tax. Despite compelling evidence and a groundswell of support that a modernisation of the property tax regime is desperately needed, the government continues to stand by its inefficient stamp duty policy while defending the introduction of even more property taxes.
Reforming this broken system should be top of the political agenda. Taxes like stamp duty create barriers for all Victorians and discourages migration to the state.
Anyone who has a genuine interest in the future economic stability of Victoria understands how removing major imposts - like stamp duty - would encourage more activity in the property market and in turn help boost housing supply and increase affordability.
Second, the rental market is drowning in significantly increased administration and cost burdens, caused by both the Residential Tenancies Act (RTA) amendments and the Victorian Civil and Administrative Tribunal (VCAT) delays.
The complexity of the RTA amendments introduced by the government in March last year has driven a mass exodus from the rental market. It’s seeing an under-resourced and underfunded VCAT system exacerbated while contributing to the mounting pressure on the rental market - which is already crippling as investors exit and property managers leave.
The establishment of this underquoting taskforce, the government’s third strike, has come under the banner of a 2022 Property Market Review by Consumer Affairs Victoria. Despite announcing the review seven months ago, there are still no details on what it found, or what its panel recommends, and yet the Government is enacting a taskforce it says is identified from this unpublished report.
Putting aside the question of whether the review was even needed, the government’s own data on underquoting says there have been just 13 instances of real estate agents facing charges since 2015, some of which pre-date current underquoting legislation.
This taskforce is a disproportionate reaction that only demonstrates what can happen if policymakers don’t engage sector experts.
Don’t get me wrong. The REIV has zero tolerance for underquoting and a long history of working with Consumer Affairs Victoria to campaign against it and educate the sector on legislation and agent obligations. At this point in time, though, there are many other priorities that need immediate focus.
The REIV, in consultation with members, submitted constructive feedback to the Property Market Review. Advocating for changes that would address systemic industry governance issues to support consumers and the sector.
But, like all Victorians, we’re still waiting for the release of a full report and an opportunity to discuss the issues raised in our submission.
Instead of a response, we’ve got, as of last week, a new taskforce. What it does, how it will operate, and who is involved is anyone’s guess.
The government’s reputation of not walking the talk of a consultation process is yet another example that it lacks respect for a sector that employs more than 15,000 Victorians and contributes over 40 per cent of the state’s tax revenue.
It’s time for change in the way the government engages with the property sector.
What we need is:
A government that listens and genuinely engages with the sector. The only way we’re going to see effective and sustainable public policy is if the government works together with key stakeholders in the sector and approaches reforms collaboratively. If it’s going to run inquiries and consultation processes, it should commit to seeing them through to the end.
A government that is amenable to reinvesting in the sector. Given current market conditions, which are headlined by a lack of housing supply, it’s as essential as ever that the government adequately funds and supports infrastructure investments in property. This is especially true when we consider the enormous tax revenue the government receives from the sector, yet, to date, the government has offered little to sector initiatives.
A history of ill-informed acts suggests that maybe this government just doesn’t understand property. And, in light of this, perhaps the answer for better property public policy is to remove it from a Consumer Affairs Minister and instead place it with a dedicated property ministerial portfolio.
Typically, governments (state and federal) allocate ministerial portfolios based on values and current and future policy priorities. Surely a sector like property – responsible for contributing some $60billion to the state economy – should have its own Minister in cabinet.
A government that acts for the good of the sector. We need a government that makes the hard policy calls around stamp duty and other inefficient regulations and is open to making Victoria a leader in innovative property policy in Australia. All Victorians are impacted by the property market - decisions made in the interest of the sector are in the interest of all Victorians.
Ahead of the upcoming state election, the REIV will continue to work with all sides of politics
to address the priority issues impacting the sector and the thousands of Victorians it affects. And, in doing so, hopefully it results in more hits than misses.
Safeguarding property sector prosperity for the good of all Victorians.
Media Contact: [email protected] 03 9205 6607