It should come as no surprise that organisations, companies and pressure groups have much to say on the State Budget.
It should come as no surprise that organisations, companies and pressure groups have much to say on the State Budget.
Their responses are pasted below, in no particular order:
Housing Industry Association of WA
The State Government's 2007/08 budget announcement to double the first home buyers stamp duty exemption threshold from $250,000 to $500,000, effective immediately, is welcomed by the Housing Industry Association as a necessary first
step in addressing housing affordability in Western Australia.
In addition, the first home buyers' exemption threshold increase to $300,000 for purchasing a vacant
lot is also welcomed.
HIA WA Acting Executive Director, Sheryl Chaffer believes this is a very positive step: "With the average price for first home buyers purchasing a new house and land package currently in the range of $400,000 - $450,000, this will give first home buyers the choice to buy a new home and still claim the stamp duty exemption.
This is an important consideration in the housing affordability equation because, with every new home built adding to the state's overall housing supply, the upward pressure on housing prices due to unmet demand is reduced."
Ms Chaffer said HIA will continue to lobby the government to keep its focus on addressing housing affordability.
Removal of stamp duty on the GST component of house and land purchases, indexation of stamp duty exemption thresholds on a quarterly basis and an increase in the first home owners grant are additional measures recommended by industry in the state tax review that have not been forthcoming in today's budget announcement.
The government's commitment to skills development and training through its education and TAFE capital works budget and apprentices and trainees placements is supported however more needs to be done to address the state's critical skills and labour shortages.
HIA calls on both the State and Federal government to work cooperatively in delivering apprenticeship incentives, training and overseas migration reforms and a long term financial commitment to building and construction industry skills development and recruitment.
Master Builders Association of WA
Homeownership prospects for first time buyers have improved following new state budget tax relief measures, according to the Master Builders Association of WA.
Master Builders' Director, Michael McLean said that stamp duty exemption for first homebuyers of established housing valued up to $500k, and land up to $300k, would provide a kickstart to the lower end of the housing market. This would lead to "knock on" effects as vendors move into new higher value properties. For a buyer of a $500k property, the saving is $20,570.
"The first home market is the engine room of building activity "Mr McLean said. "Young buyers have been locked out of the market over the last year or so. This stamp duty relief will assist them to reenter".
Mr. McLean noted other budget elements which will assist housing affordability in the medium term.
Measures to improve the land supply process and a continuing commitment to trade training will complement recent Federal government initiatives to improve the supply of skilled trades to the industry.
Mr McLean also welcomed the $5.8 billion capital works programme for 2007/08.
"This major building program will create vital infrastructure capacity for the state and contribute to the continued health of the industry," Mr McLean said.
Association of Mining and Exploration Companies
The Association of Mining and Exploration Companies (AMEC) has welcomed some of the specific measures outlined in the West Australian 2007 - 2008 State Budget as announced today by the State Treasurer, The Hon. Eric Ripper.
AMEC's Chief Executive, Dr Justin Walawski said that 'the industry is likely to be pleased with budgetary measures aimed at education and training including those increasing apprenticeships and traineeships. Equally, some improvement of the State's ports has attracted approximately $99 million and, assuming this is targeted at places such as Port Hedland and the mid-west, could assist with encouraging mineral exploration and the eventual export of minerals".
The mining industry is also likely to commend the State Government on the $1.2 billion allocated to improving road transport with almost two thirds of the allocation being directed at regional areas.
However, Dr Walawski said that "the industry is likely to be disappointed if they were expecting a direct reinvestment by the State Government in the State's mineral exploration sector and that disappointment is almost certain to extend to the absence of tax reduction or reform in areas traditionally faced by business."
AMEC's Chief Executive noted the State Treasurer is critical of the recent Federal Government Budget for not reinvesting in the country's most productive State and Dr Walawski said that "In criticizing the Federal Budget, the Treasurer clearly understands the need to re-invest in areas which are the most productive. However, in making that criticism, the State becomes vulnerable to similar
observations about a failure to reinvest in mineral exploration when WA now reports its lowest ever recorded share of the country's mineral exploration. Having said that, the industry remains hopeful that policy and fiscal measures which go toward making the State more competitive and attractive for mineral exploration will be introduced at some point in the near future."
Chamber of Minerals and Energy
The high performance of the Western Australian economy is directly attributable to the State's near $50 billion resources sector. The
contribution of the resources sector is now delivering record royalties, employment and flow on economic benefits for Western Australians, providing the strong foundation for this year's State budget.
The value of the resources sector grew by 23% in 2006 to $48.4 billion, with resource exports from WA representing around 80% of the States total merchandise exports.
"The performance of the resources sector now underpins strong State economic growth forecasts of 4.5% in 2007/08. State Government revenue through resource industry royalties provided the cornerstone of the near $2 billion surplus this financial year and will strongly contribute to the forecast $1.45 billion surplus for next year," said CME Chief Executive, Mr Tim Shanahan.
Mr Shanahan said that continued investment in key industry inputs such as competitive electricity and water, and supporting infrastructure on which industry relies, such as roads and ports, can only facilitate further development across the State's resources regions.
$80 billion in resources projects are either being planned or presently underway in Western Australia. With increased global demand for Western Australian resource commodities, CME is confident that the resources sector will continue to drive the Western Australian and Australian economies in the medium to long term.
Mr Shanahan said it was imperative the State Government continues to work closely with the resources sector to ensure the benefits of a strong resources industry continue to flow through to the Western Australian community. Further action in streamlining critical project approvals and investing in key social and physical infrastructure can only benefit the State's long term prospects.
Standard & Poor's
Standard & Poor's Rating Services said that today's budget for the state of Western Australia is consistent with the 'AAA/Stable/A-1+' ratings already assigned to the state. The 'AAA' rating is the highest rating assigned by Standard & Poor's. The rating on Western
Australia reflects the state's strong operating performance, its prudent fiscal management, and low debt burden.
"The Western Australian government has budgeted for taxation relief, which is largely matched by higher than previously expected taxation receipts, including mining royalties," said Standard & Poor's credit analyst Danielle Westwater of the Sovereign & International Public Finance Ratings group. "Despite these taxation relief measures, and some operating expenditure growth, the state continues to forecast strong operating surpluses at levels similar to those previously forecast."
The state's strong economic growth is expected to remain at healthy levels. However, forecast economic growth is likely to continue to put pressure on the state's capital provision, with skill and labor shortages in the state already leading to delays in capital expenditure. On the flip side, this will mean that forecast debt is unlikely to reach expected levels.
While Western Australia's debt levels are expected to remain low, a key risk to the rating remains the state's difficulty with cost control. The state regularly exceeds its operating expenditure growth estimates. The state is again expected to not meet its previously forecast expenditure growth in fiscal 2008, and is now budgeting operating expenditure growth of 4.6%, compared with the midyear financial projection of 2.9%.
"Western Australia's windfall revenues, including volatile revenues from the commodity boom, are expected to match the state's taxation reductions and forecast operating expenditure growth," said Ms. Westwater. "However, the biggest risk to the state's rating remains a downturn in the mining sector, which could create a gap between the state's operating expenditure and operating revenue."
Property Council of Australia (WA)
The reform of land taxation announced in the 2007-08 State Budget and extra concessions for first-home buyers, are welcomed by the peak industry body representing property owners, managers and developers.
However the WA Government has failed to deliver more broad-based tax reform, said the Executive Director of the Property Council of Australia (WA) Mr. Joe Lenzo.
"The land tax reforms and stamp duty concessions for first home buyers are long overdue.
"However WA continues to be one of the highest taxing States in Australia.
"The rates for the State's biggest tax, stamp duty on property purchases, are still higher in 2007 than at the time the Labor Government took office six years ago, despite unprecedented economic prosperity and skyrocketing tax revenues.
"On balance the State Government has missed an opportunity of using economic good times to lock in an enduring legacy of lower taxes.
"The Budget has not lived up to the community's expectations for more broad-based tax reform as recommended by the State Tax Review", said Mr Lenzo.
Australian Society of Certified Practising Accountants (CPA Australia)
CPA Australia says today's Western Australian budget delivers long-awaited relief with reductions to stamp duty for first home buyers, land tax and motor vehicle stamp duty - delivering $437 million in tax cuts.
"The Treasurer today announced a number of key tax reforms which are in line with those sought by CPA Australia and The Institute of Chartered Accountants in Australia in a joint submission to the State Taxes Review," says Mr Aidan O'Grady, Director of the WA Division of CPA Australia.
"The doubling of the stamp duty exemption threshold to $500,000 for first home buyers is very necessary in a state where property values have soared to unprecedented levels on the back of the resources boom," he said. "This initiative, which takes effect immediately, will save new homebuyers $20,700 on the cost of a $500,000 property.
"We also welcome the land tax exemption thresholds on vacant land being doubled to $300,000," he said.
Reductions in motor vehicle stamp duty - equating to a saving of $525 on the average new family vehicle are also positive moves, as are increased stamp duty thresholds for light vehicles and a flat stamp duty rate for all heavy vehicles.
Mr O'Grady said CPA Australia would like to have seen stamp duties on business property transfers and payroll tax tackled in this Budget, but looked forward to further movement on these issues in the future.
"The Treasurer indicated that there is still work to be done on payroll tax harmonisation and the rewriting of the Stamp Duty Act, and that he continues to be focussed on future tax relief. We will continue to provide input into this process in the drive to make WA a better state in which to do business.
"With Western Australia's current fiscal strength, the newly announced cuts are both affordable and essential. WA businesses and individuals are currently the most heavily taxed in the country, paying a much higher rate of tax in real terms than those in other states.
"We are pleased that the government is making a commitment to funding infrastructure projects from the Budget surplus, including provision of funds for future water initiatives."
