Sunday Herald Sun - Housing slide to rob state Budget

Date: 24 Feb 19

PLUNGING returns from stamp duty, caused by a slowdown in Victoria's property market, threaten to wipe hundreds of millions of dollars from the state Budget.

Senior labor MPs say further falls in revenue will force the Andrews Government to make some tough choices before May, in order to avoid fee rises or new taxes.

Treasurer Tim Pallas was asked by the Sunday Herald Sun if he would rule out new charges for taxpayers in May.

While he did not directly answer, he indicated the strength of the economy should get the government through the housing market correction. Property transactions slumped 35 per cent in the final quarter of 2018.

Real Estate Institute of Victoria data obtained by the Sunday Herald Sun shows just 17,596 sales in the final three months of the year, compared with 26,506 the previous year and well behind the highwater mark of 27,311 in 2016.

In November, the govern-ment revealed Treasury had already slashed $2.4 billion from its tax estimates over the next four years. Mr Pallas said the government's landmark investment in transport, schools and hospitals is fully costed and fully funded".

REIV chief executive Gil King said "Fewer sales should be of concern to the govern-ment as it translates to reduced levels of stamp duty and other property taxes which are a major contributor to the Budget bottom line."

Victorian Council of Social Service chief executive Emma King also called for stamp duty reform and "if belt tightening is required it must be in areas that won't make life even harder for struggling Victorians".

Victorian Chamber of Com-merce and Industry chief executive Mark Stone said Victoria should be equipped to "weather unplanned changes to revenue" but a further deterioration in revenue "may require the government to reconsider debt levels in line with retaining Victoria's AAA credit rating". 

See the original article on Sunday Herald Sun below.