Over the past fifteen years Sydney has earned the unwanted reputation as Australia’s least affordable city, a place that many families and young people find too expensive to live in.

People living in Sydney are creative, industrious and resourceful, however they are working harder just to keep their heads above water.

The biggest driver of Sydney’s growing cost of living is the cost of homes. Sydney homebuyers make higher mortgage repayments as a share of disposable income than any other state.^[1] Only 64 per cent of Sydney households own their home, less than every other Australian capital city except Darwin.^[2]

The NSW Liberals & Nationals want home ownership to be more than a ‘dream’. We want to make it easier for individuals and families to get into the Sydney housing market and reduce the pressure on household budgets from mortgage costs. We want to tackle Sydney’s housing stress head on.

In government, the NSW Liberals & Nationals will introduce a range of practical measures to make housing more affordable.

Our $630 million Action Plan to Make Sydney Liveable Again includes:

• Repealing NSW Labor’s $429 million ‘Homebuyers Tax’ on property purchases;
• Providing a Regional Relocation Grant of $7000 to encourage ‘whole of NSW’ growth;
• Extending stamp duty concessions to Empty Nesters who are over 55 years old, who choose to move from a house to a smaller dwelling; and
• Accelerating land release and reducing infrastructure costs on new developments.

Our Action Plan to Make Sydney Liveable Again will stimulate construction, facilitate better utilisation of housing stock and encourage regional development.

Over the next 4 years our plan will support 40,000 households to relocate from Sydney to regional NSW.

These initiatives will reduce the population pressure on Sydney and provide real economic benefits to regional NSW.

A $630 million Action Plan to Make Sydney Liveable Again

A Liberals & Nationals Government will introduce practical measures to kick-start the housing market.  Our Action Plan to Make Sydney Liveable Again includes:

• Repealing NSW Labor’s $429 million ‘Homebuyers Tax’ on property purchases;
• Providing a Regional Relocation Grant of $7,000 to encourage ‘whole of NSW’ growth;
• Extending stamp duty concessions to Empty Nesters who are over 55 years old, who choose to move from a house to a smaller dwelling; and
• Accelerating land release and reducing infrastructure costs on new developments.

1.    Repealing NSW Labor’s $429 million Homebuyers Tax on property purchases

The NSW Liberals & Nationals believe that additional property taxes cruel the construction industry at a time when people and the economy can least afford it.

In May, under the cover of a Federal Budget, NSW Labor announced that it would introduce a new property tax.

The new tax, which replaced the Property Transfer Fee, will collect an estimated $429 million per annum additional revenue for the NSW Government. It was introduced despite the fact that the average homebuyer in Sydney already pays the most stamp duty of any State capital:^[3]

The new tax will have a significant impact across many suburbs in Sydney and regional NSW. According to the Property Council of Australia,^[4] the new tax will affect:

• 46% of properties sold in Strathfield;
• 85% of the properties sold in Balmain;
• 84% of properties sold in Drummoyne;
• 79% of properties sold in Coogee; and
• 35% of properties sold in Kiama.

While the new tax will hit many established homes, it will have a twofold effect on new housing development.

Housing development companies will pay the new tax when purchasing vacant land for development, and once again when final properties are sold.

This means that all buyers of new homes will pay the new tax at least once, and for home and land packages worth more than $500,000, they will pay the tax twice.

2.    A Regional Relocation Grant

Sydney faces massive population growth over the next 30 years. This will mean greater congestion on roads and public transport and pressure on house prices.

The NSW Liberals & Nationals are committed to ‘whole of state’ infrastructure and development and believe there are many great opportunities for people outside the Sydney basin.

We believe that the challenges and opportunities of population growth should be shared across the State, not concentrated in Sydney.

In government, the NSW Liberals & Nationals will introduce a $7000 Relocation Grant for people who sell their property in Sydney and relocate to regional NSW.

The program will be limited to 10,000 grants per annum.

To be eligible for the grant, a family must sell their house or unit in the Sydney region and buy a house or unit outside Sydney. The value of the purchased property must be less than $600,000 and must be the principal place of residence.

The NSW Liberals & Nationals will work in consultation with local government and the community to define the geographic boundaries of ‘Sydney’ and ‘Regional NSW’. Local councils who are currently concerned about local population pressures will have the choice of opting out of the scheme.

Current projections are that over the next 25 years Sydney’s population will grow by 1.5 million and the population of NSW outside of Sydney will grow by 470,000[5].

Despite having 63% of the State’s population, Sydney is expected to accept 76% of population growth. At the same time, the population in Northern and North Western NSW will fall over the next 30 years.

We believe that NSW does not begin and end with Sydney and we understand that one of the answers to managing population pressures is to encourage whole of state growth.

The Regional Relocation Grant will reduce the transaction costs in moving, such as stamp duty. The Henry Tax Review (2010) cited stamp duties as a deterrent to relocating home:

“Stamp duty is triggered by the sale of a property. This creates the possibility for people to avoid stamp duties by choosing not to buy or sell property, which can result in people not living in the house they really want to live in or staying too long in a house that could be better used by somebody else. This probably results in a poor allocation of the housing stock.”[6]

3.    Extend the Empty Nester Transfer Duty Concession to over 55’s

The NSW Liberals & Nationals believe that seniors who choose to move from larger houses to smaller dwellings should be rewarded.  However, existing Budget measures exclude a larger number of people in the 55 – 65 year old age bracket, who are at a stage of life when downsizing is under consideration.

At age 55, many people are planning for retirement and related changes in lifestyle and home location.  Current measures ignore this important group of people and the opportunity to assist them at a very relevant time in their decision-making.

The NSW Liberals & Nationals will extend current transfer duty concession measures which currently apply to over 65s, to include people over 55.  Indiciduals over 55 years selling an existing property and buying a newly constructed home costing up to $600,000 will pay zero transfer duty.  The exemption will apply to sales between 1 July 2011 and 30 June 2012.

Downsizing benefits many seniors allowing them to move to properties that better meet their needs and are more manageable.  Downsizing also benefits families looking to get into the housing market or needing to move to a bigger property by freeing up larger houses and reducing price pressure.

According to a study by the Australian Housing and Urban Research Institute (AHURI) there are 854,000 properties in NSW with one or more person aged over 55 living in them^[7].  Of these properties close to one third have one spare bedroom and more than half have two or more spare bedrooms.

4.    Accelerating land release and reducing infrastructure costs on new developments.

One of the key drivers of Sydney’s housing stress is the lack of supply. The NSW Liberals & Nationals will accelerate land release and help reduce costs of home ownership by publishing annual ‘real time’ new dwelling targets for Sydney, the Hunter and Illawarra. They will form a benchmark for performance in the planning system and allow local communities and their representatives’ access to more information to join in debate on housing issues, before decisions are made.

In government, the NSW Liberals & Nationals will also make infrastructure costs contestable by making the formulation of government levies transparent, and considering any other proposals that offer better ways of delivering infrastructure that maintains or exceeds appropriate standards.

Sydney’s Housing Squeeze

Housing affordability has become the number one issue facing young Sydney families and individuals.

Sydney homebuyers make higher mortgage repayments as a share of disposable income than any other state.[8] Only 64 per cent of Sydney households own their home. This is less than every other Australian capital city except Darwin.[9]

Homebuyers in Sydney face the highest costs in the nation, with the median price in 2009 at $544,000, compared with Melbourne at $441,900 and in Brisbane at $419,000.[10]

A key driver of Sydney’s housing affordability crisis is the fall in new home construction rates.  2009 was NSW’s worst year for new home construction in statistical history. In contrast it was Victoria’s best year since 2002.[11] In 2009, 25,000 houses and units were approved in NSW, compared to 45,000 in Victoria.[12]

A strong driver of increasing house prices is the impact of taxes and charges. NSW levies range from $33,000 to $36,000 a home lot, about 50 percent higher than the Queensland average[13].

Costings

The cost of the NSW Liberals & Nationals Action Plan to Make Sydney Liveable Again is $630 million over four years. This includes additional taxation revenue resulting from additional housing demand induced from this policy.

 

The NSW Liberals & Nationals will release independently verified policy costings prior to the NSW State Election.

NSW Shadow Treasurer, Mike Baird on Budget Day 2010

Kristina Keneally and Eric Roozendaal are living in a parallel universe if they think NSW is leading the economic recovery, Shadow Treasurer Mike Baird said today.

State Final Demand figures released by the Australian Bureau of Statistics today show NSW had the slowest growth of all mainland states over the past decade.

Earlier today, I twittered with Barry O'Farrell regarding my issues for NSW. Given I only have 140 letters to express this, I mentioned:

1. Traffic & Resource Infrastructure
2. Government Land Release
3. Health (Mental Care & Hospitals)

Of course, the Liberal NSW Leader agreed, and directed me to a website of his - "startthechange.com.au"

I checked it out.

The Liberal/Nationals have 5 Top Priorities, but from the policies listed, I have commented on those I feel are more pressing.

The Victorian Government’s State Budget announcement to cut payroll tax highlights the Keneally Labor Government’s failure to do enough to keep NSW competitive, NSW Opposition Leader Barry O’Farrell and Shadow Treasurer Mike Baird said today.

The Victorian payroll tax rate will be 4.9% from July 1. In NSW the rate will be 5.5% on 1 January 2011.

“After 15 years of incompetent Labor Government in NSW, our state has lost its competitive edge,” Mr O’Farrell said.

The continued under performance of the NSW economy is clear evidence NSW needs to create jobs as a means of turning around the state’s economy, Shadow Treasurer Mike Baird said today, following the release of the CommSec State of the States economic rankings, which placed NSW last.

"Today's CommSec report shows that under Labor NSW has gone from being the premier state, to the cellar dweller,” Mr Baird said.

The NSW Liberals & Nationals are committed to disciplined and effective management of State Government finances in order to fund the delivery of basic services, like hospitals, schools and roads.

We simply cannot live beyond our means. Over the last 10 years, expenses have grown at an average of 6.6 per cent - and 7.6 per cent this financial year.[1] At the same time, revenues have only grown by 5.7 per cent.[2]

A NSW Liberals & Nationals Government will conduct a complete audit of the NSW Government’s financial position within nine months of taking office.[3]

The audit will be an open process that will encourage participation from the public service and from the public. It will be thorough, independent and will rule a line under Labor’s incompetence.

The audit will be undertaken by experts, tasked with identifying and reporting on issues including:

• - the state of the NSW balance sheet, including on budget and off budget assets and liabilities;
• - the long-term sustainability of the NSW Budget position, including the underlying cost and revenue drivers;
• - weaknesses in financial controls and financial risk management frameworks;
• - wasted expenditure that has built up over 14 years of Labor including program and infrastructure cost overruns;
• - opportunities to strengthen the NSW financial position;
• - a review of all costs and performance of State Government services to global benchmarks; and
• - measures to drive better performance through increased accountability and transparency in financial reporting.

An interim report will be completed before our first Budget is handed down in 2011, with a final report completed by the end of that year.

The NSW Liberal & Nationals will start constructing a world-class conference and exhibition facility in our first term of Government.

In 2007 the NSW Government commissioned a review of Sydney’s convention and exhibition facilities, which found that NSW needed greater capacity in the Sydney CBD to host major conventions. It is estimated that under-provision of convention and exhibition facilities will cost Sydney $477 million in economic activity and 3,037 jobs each year.[1]

To ensure the project starts quickly the NSW Liberals & Nationals will start the procurement process from Opposition.

We will commission an independent professional Feasibility Study, to be overseen by an Expert Panel with requisite experience in the delivery of infrastructure, and the tourism industry.

When the study is complete, the private sector will be invited to start preparing submissions before March 2011 for an accelerated Expression of Interest process we intend to commence after the election.

The Feasibility Study, which is supported by peak infrastructure and tourism bodies, will identify:

• - the best location for a new or expanded facility;
• - make recommendations on the size and facilities required;
• - develop a funding model for the convention centre, including the potential for private investment and private public private partnerships; and
• - identify the benefits to the NSW economy from the new facility including models to ensure that regional NSW benefits from the infrastructure.

The panel will also develop a target list of international conferences and events that could be attracted to the new convention centre.

The policy will help grow visitor and convention market traffic into Sydney, from which point, visitors are well placed to travel onto other NSW regional tourism attractions.  Investing in this long overdue infrastructure will boost the NSW economy and help achieve the growth and the competitive edge we need.

Growing the NSW economy is not just about sharpening our competitive edge with our rival Australian states and territories.

Our opportunities are also beyond Australia – especially in the powerhouse economies of China and India, and our other Asia Pacific neighbours.

It is our objective to make Sydney not just Number 1 in Australia – but a leading economy and financial capital in our region.

It is disappointing that none of the four Labor Premiers over the past 15 years made it a priority to make official visits to our significant trading partners. These relationships are too important to put on hold.

In February 2010 Barry O’Farrell led a delegation of senior business representatives from NSW to China and India.  The delegation met with senior government officials and business leaders in both countries. The visit was conducted with no taxpayer funding.

Visiting Beijing and Shanghai was an opportunity to visit Australia’s Shanghai Expo 2010 Pavilion, which expects to receive 40,000 visitors per week and help promote greater investment and trade between NSW and China. We need to aggressively pursue these types of opportunities.

Barry O’Farrell also became the first NSW MP to visit both the Shanghai, and Mumbai NSW Trade and Investment offices, where local staff work hard on behalf of NSW businesses and residents to maximise our trade and investment opportunities every day.

Trade relationships with these important and growing markets need time, trust and maturity to maximise benefits to the NSW economy and citizens.

To prove our resolve to develop long term relationships in these markets, a NSW Liberals & Nationals Government will;

• - return to China and India in the first six months of government with a delegation led by the Premier and the Treasurer; and
• - consolidate and develop relationships and promote the skills and resources of NSW.

Industries such as information and communication technologies, mining and resources, financial services, education, pharmaceutical and health care, and building and construction are among the many opportunities to pursue for NSW in these growing economies.

Sydney is the most expensive place in Australia to buy a home.  The median house price in Sydney is $595,000, compared with Melbourne ($518,000) and Brisbane ($446,000).[1]

Many people are forced to live far away from work and family to afford a home.  Others are stretched to breaking point with huge mortgages and many give up on the dream of home ownership.

NSW’s population is expected to grow to over 9 million by 2036[2] - an increase of 2.25 million people, with around three quarters expected to live in Sydney. Housing experts project a NSW housing shortfall of 159,000 dwellings between 2009 and 2028.[3] We are simply not producing the dwellings we need to house our growing population.

The NSW Liberals & Nationals will accelerate land release and help reduce costs of home ownership by:

• - Publishing annual ‘real time’ new dwelling targets for Sydney, the Hunter and Illawarra;
• - ensuring communities have the facts they are entitled to and are involved in local planning decision-making;
• - promoting growth in the regions and encouraging decentralisation; and
• - applying transparency to state infrastructure levies and introducing the option of contestability in the provision of infrastructure.

Growing NSW is about Sydney and our regions.  We are committed to whole-of-state development. We will end Labor’s neglect and erosion of critical services like health care, schools and transport that support choices about moving to and staying in, regional areas.