State Government

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<p>GUEST OBSERVER</p>
<p>The REIQ welcomes the State Government’s extension of the First Home Buyer Grant boost until December 2017, however is disappointed that the Government has refused to broaden the grant to include established homes in regional Queensland.</p>
<p>Regional Queensland property markets continued to struggle, with the housing oversupply one of the region’s biggest problems.</p>
<p>We welcome the goal behind the First Home Buyer Grant, which is to stimulate jobs and this measure has been successful in the southeast corner, with the added benefit of additional supply moderating price growth where demand is strong.</p>
<p>However, additional supply in regional Queensland is going to further slow these markets and make any price recovery much longer to come into effect.</p>
<p>The REIQ also welcomes those measures designed to stimulate jobs in regional Queensland, where climbing unemployment is impacting on the community in devastating ways. </p>
<p>Unemployment destabilises housing tenure and this uncertainty is damaging to the fabric of the community.</p>
<p>The government’s $200 million jobs program, Works for Queensland, delivered over the next two years into regional Queensland, will tackle the need for infrastructure in regional communities and also the unemployment issue head on and we applaud these efforts.</p>
<p>The REIQ was disappointed this government has chosen to ignore advice from a range of experts on abolishing stamp duty.</p>
<p>Stamp duty is an onerous fiscal burden that stifles housing mobility and many experts are in agreement, including the Henry Tax Review, that stamp duty should be replaced.</p>
<p>When the cost of selling your house comes with an additional price tag of tens of thousands of dollars it gives many people pause.</p>
<p>Empty nesters wait longer to downsize and young families wait longer to upsize and this creates inefficiencies in the housing market that are undesirable.</p>
<p>The real estate sector provided a significant revenue stream for the government and employed around 50,000 Queenslanders.</p>
<p>The government should heed the advice of the experts when it comes to the health and well-being of this vital sector in the Queensland economy.</p>
<p>The key pillars that underpin the real estate profession are fragile – jobs figures are soft, wages growth is flat and investors are facing tightened lending criteria.</p>
<p>Real estate is facing considerable head winds and the Government needs to acknowledge these challenges and devise appropriate policy responses to ensure its continued growth,” she said. </p>
<p>Antonia Mercorella is chief executive officer, REIQ, and can be contacted <a href="https://www.reiq.com/" target="_blank">here</a>.</p>
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jchancellor-FAypfDUnLy

Key pillars underpinning real estate profession are fragile: Antonia Mercorella 

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<p>GUEST OBSERVER</p>
<p>China’s next Five-Year Plan is due to be formally approved by the National People’s Congress in March 2016.</p>
<p>One of the areas of focus is the role of China’s State-Owned Enterprises, generally viewed with suspicion by the West and also seen within China as bloated and in need of a clean-up.</p>
<p>The Five-Year Plans have become a flexible political tool in the hands of central leaders seeking to shape the behaviour and priorities of diverse ministries and local governments.</p>
<p>China’s Cabinet recently released the latest document in what will be a cascading series of plans and guidelines feeding into China’s policy settings between now and 2020.</p>
<p>The State-Owned Enterprise (SOE) Guidelines are part of tackling China’s larger economic reform challenge. This requires shifting the overall macroeconomic growth model from domestic investment (mostly infrastructure) and a focus on exports, to one of growth led by domestic consumption and an expanded services sector.</p>
<p>The guidelines are the latest stage of an SOE reform process underway since the 1990s, as the Chinese state-controlled economy has made way for a rapidly growing private economy sector.</p>
<h2>The current state of SOEs in China</h2>
<p>The words typically used to describe the SOE sector in China are “inefficient”, “bloated”, and “bulky”.</p>
<p>The sector has been slimmed down a lot over the past decades, but still comprises 110 conglomerates. SOEs accounting for around 60% of total revenue are overseen by the central government’s State Owned Assets Supervision and Administration Commission. And between 25,000 – 150,000 SOEs (depending on which definition of <a href="https://www.bloomberg.com/news/articles/2015-07-30/china-s-state-owned-companies-may-face-reform">“</a>state-ownership<a href="https://www.bloomberg.com/news/articles/2015-07-30/china-s-state-owned-companies-may-face-reform">”</a> is used) are controlled and managed by provincial, municipal and lower levels of government.</p>
<p>The larger SOEs maintain monopolies over key sectors of the economy (energy, mining, infrastructure) and smaller SOEs are characterised by low productivity and high debt levels. A lot of the problems and inefficiencies stem from the fact that the interests controlling SOE behaviour are not necessarily aligned with those of the wider economy or society.</p>
<h2>Time for a clean out</h2>
<p>Authorities have been consolidating and “cleaning up” SOEs for better resource allocation for a while now. China’s two major bullet train makers completed consolidation in the first half of 2015, while China Railway Corporation recently announced an asset-reorganisation with one of its subsidiaries.</p>
<p>Central authorities indicated earlier this year that Beijing would like mergers and acquisitions to result in a figure of around 40 conglomerates under the SASAC.</p>
<p>The real challenge will be in getting the Provinces to cooperate in cross-border mergers of provincial and municipal SOE assets. The ambitious Beijing-Tianjin-Hebei regional integration <a href="">blueprint</a> provides an important testing ground for getting different localities to cooperate, share and consolidate economic and social planning and resources.</p>
<h2>Commercial vs ‘social’</h2>
<p>Schools, universities, medical goods and service providers, and operators of public utilities (water, sanitation, energy, transport and communications) together form a huge and important part of the Chinese economy. It is important that they be run efficiently, but also important that they fulfil the social purposes for which they exist.</p>
<p>Providing equitable access to essential public goods and services means these firms cannot be expected to run on purely commercial considerations. And so the SOE guidelines indicate that SOEs will be categorised as either “commercial” or “public goods and services”, and dealt with accordingly. Commercial SOEs will be encouraged to become leaner, more efficient, and more market-oriented, while “social” SOEs will be encouraged to focus more on the quality of service provision.</p>
<h2>Diversifying SOE ownership</h2>
<p>A key part of making SOEs more efficient and more market-oriented is to allow private investors to purchase ownership stakes.</p>
<p>SOEs will be encouraged to bring in “various investors” through share-rights swaps, issuing new shares and/or convertible bonds and other means. Institutional investors in particular, including foreign ones, will be allowed/encouraged to buy stakes in SOEs, and SOEs will be allowed to experiment with employee share ownership schemes.</p>
<p>Oil and gas, electricity, railways and telecommunications have been identified as suitable for “limited” private investment: indeed, key energy companies Sinopec and National Petroleum Corp have already begun selling off parts of their operations.</p>
<p>While the Singapore Temasek model of state investment has been <a href="">cited</a>, strategic SOEs in China will never fit that model, but will remain under strict state (ie. Party) control.</p>
<p>Improved independent decision-making at board level will be encouraged by requiring the boards of all SOEs to have a majority of non-executive (external) directors. More professional managers will be employed, and a more flexible and market-based compensation system for SOE officers will link pay to company performance.</p>
<h2>Obstacles to reform</h2>
<p>The key obstacle to SOE reform will be overcoming “pushback” from entrenched interests at local, provincial and national government levels. Overcoming this obstacle is made particularly difficult because of the emphasis on leadership of, and control by, the Chinese Communist Party.</p>
<p>Reforming the Party, particularly to reduce corruption, is also an important part of the Five-Year Plan, but loosening the Party’s grip on control is nowhere in sight. The extent to which the politics of the 13th Five Year Plan remain compatible with its economic reform goals therefore remains to be seen.</p>
<p><em><span class="fn author-name">Alice de Jonge is s</span><span style="line-height: 1.3em;">enior lecturer, International Law; Asian Business Law, Monash University and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/alice-de-jonge-118840" target="_blank">here</a>.</span></em></p>
<p><span style="line-height: 1.3em;"> </span></p>
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China’s grip still tight on state-owned enterprises

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<p><img src="https://counter.theconversation.edu.au/content/79581/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1"></p>
<p>GUEST OBSERVER</p>
<p>The Victorian government’s 2017 housing policy contains a bulk transfer of public housing to housing associations. Housing Minister Martin Foley’s explanation is that “the state is a terrible housing manager”. </p>
<p>A similar rationale underlies the handing of public housing estates to private developers to build private housing, the sales of which fund some new public dwellings with the added justification of increasing social mix.</p>
<p>Our soon-to-be-published research examines the rollout of this program. In inner Melbourne, following redevelopment of the Kensington, Carlton and Prahran estates, nine more estates have been targeted. The tenants of buildings to be demolished will be relocated from mid-2018, according to a government briefing paper.</p>
<p>The federal Greens MP for Melbourne, Adam Bandt, has criticised the program as selling public land to private developers “for a bagful of cash and a smattering of new social housing”. He adds that Melbourne needs “a large-scale build of new public housing on a 1960s scale”. </p>
<p>Foley’s defence of the rollout, in an odd non sequitur, is that Labor:</p>
<p>… can’t condemn another generation of Victorians to live in housing poverty.</p>
<p>A flawed idea that began with Thatcher</p>
<p>Public housing stock transfer and estate redevelopments in public-private mix are part of a trend that began in Thatcher’s Britain. The Blair government continued the approach, which has become neoliberal policy orthodoxy in the UK and Australia. </p>
<p>This allows governments to wriggle out of providing housing for people on low incomes by transferring responsibility to non-government and private sectors. </p>
<p>The thing is, housing associations are not necessarily secure or better managers, especially as they become institutions in their own right. Furthermore, privatisation of public land to fund upgrades to public housing not only fails to deliver good value for taxpayers, but is unsustainable. At some point there will be further upgrades needed and no land left to sell.</p>
<p>The argument that the state should not be in the business of managing or building housing is one we’re hearing more often. It’s connected to the small-government case more broadly: should the state be involved in health care, education, the media?</p>
<p>As the ABC and BBC demonstrate, however, state-owned enterprises can operate perfectly efficiently. And, ironically, they provide a rare source of ideological independence from both government and big business.</p>
<p>Why shouldn’t the state fund an ongoing program of upgrading, replacing and building public housing? Why shouldn’t it establish a regional organisational structure which is locally responsive? There is no case for assuming that, simply because the state is involved, construction and management must be inferior and people will be consigned to “housing poverty”. </p>
<p>The major determinant is a matter of finance. And the state will always have better and cheaper access to finance than the non-government and private sectors. </p>
<p>If finance were really as impossible a problem as governments like to make out, and if it were deemed reasonable that privatisating public land could help fund this process – and these are big ifs, which should be publicly debated – then the government should be the developer, to retain control of the profits. These should go back into public housing instead of disappearing with a private developer. </p>
<p>Lessons from Carlton and Kensington</p>
<p>The Victorian government’s call for tenders for its Public Housing Renewal Program does indicate some learning from the experiences at Kensington and Carlton.</p>
<p>The sale price for the public land “will reflect the land value and must meet a minimum threshold based on a market value mechanism agreed by the Valuer General Victoria [VGV]”. This is an important concession, though VGV valuation is no guarantee of market price. </p>
<p>The tender document notes that “where the return achieved by the development proceeds exceeds a benchmark, it is anticipated that there will be an agreed sharing of the excess”. The government will need to keep a close eye, though, on the costs and profits declared by the developer. </p>
<p>The specification for the number of social housing dwellings on the redeveloped estates to “exceed the current number of public housing dwellings by 10%” is a definite improvement on the Kensington project. But replacing three-bedroom family dwellings with studio apartments, as is the case at Carlton, doesn’t constitute an increase in tenants. </p>
<p>Even if tenant numbers do increase, 10% seems a disappointingly modest aim.</p>
<p>It is the social mix objective that really brings this approach unstuck, however, especially when the favoured model of private developers is to separate public and private residents by buildings, if not entire precincts. </p>
<p>The minister reacts with horror to the suggestion that inner-city public land should start from the presumption of 100 percent public housing and work back from there according to the development economics. It seems a manufactured horror. Gentrified inner Melbourne is not Brixton or Baltimore – these estates are surrounded by private housing and excellent public services and community facilities where opportunities for interaction are plentiful.</p>
<p>Let’s dismiss the fig leaf of increasing social mix on estates in privileged inner cities. We should concentrate instead on providing as much low-income housing as we possibly can for people who desperately need somewhere decent to live.</p>
<p><span class="fn author-name"><a href="https://theconversation.com/profiles/kate-shaw-39629" target="_blank">Kate Shaw</a> is </span>Future Fellow, University of Melbourne and author for The Conversation.</p>
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Why should the state wriggle out of providing public housing? Kate Shaw

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<p>GUEST OBSERVER</p>
<p>In late 2015, the Greater Sydney Commission was established to oversee metropolitan planning and development in Sydney.</p>
<p>The commission is intended to function as a partnership between state and local governments, with both the power to create overarching planning proposals and the mandate to work with local governments on local planning controls.</p>
<p>NSW Premier Mike Baird has tasked the commission with delivering 680,000 new homes by 2031, with the aim of tackling the city’s unfolding housing affordability crisis.</p>
<p>In December, Lucy Turnbull was announced as the inaugural chief commissioner for the Greater Sydney Commission. In addition to a successful career in commercial law and investment banking, Turnbull has a history in local government – in 2003 she became the first female lord mayor of Sydney – and is the author of the 1999 book Sydney: Biography of a City. Since 2010 she has been the deputy chair of the Coalition of Australian Governments’ City Expert Advisory Panel.</p>
<p>Dallas Rogers spoke with Lucy Turnbull on the establishment of the Greater Sydney Commission, its structure, plans and mandate from the premier, as well as criticism from some urban planning experts that the commission is an undemocratic “top-down” approach to development.</p>
<p>To hear the interview in full, <a href="https://theconversation.com/speaking-with-lucy-turnbull-on-the-greater-sydney-commission-56005?utm_medium=email&amp;utm_campaign=Latest%20from%20The%20Conversation%20for%20March%2010%202016%20-%204476&amp;utm_content=Latest%20from%20The%20Conversation%20for%20March%2010%202016%20-%204476+CID_233775bf67bcd3c3aa2e3c2a6a4a3704&amp;utm_source=campaign_monitor&amp;utm_term=Speaking%20with%20Lucy%20Turnbull%20on%20the%20Greater%20Sydney%20Commission" target="_blank">click here</a>.</p>
<p><em><span class="fn author-name">Dallas Rogers<a href="https://theconversation.com/profiles/dallas-rogers-5269" rel="author"> </a>is l</span><span style="line-height: 1.3em;">ecturer in Urban Studies, Western Sydney University and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/dallas-rogers-5269" target="_blank">here</a>.</span></em></p>
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Lucy Turnbull discusses the Greater Sydney Commission

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<div class="page" title="Page 1">The New South Wales property market has driven the state into a large operating surplus, with stamp duty revenue on property transfers forecast to have grown 20.6% in 2014/15 and elected to grow a further 7.6% in 2015/16.</div>
<div class="page" title="Page 1"> </div>
<div class="page" title="Page 1">According to Commonwealth Bank economist <span style="line-height: 1.3em;">Gareth Aird, property transaction related revenue typically, around 10% of total government </span>revenue, has significantly boosted some state budgets.<span style="line-height: 1.3em;"><br></span>
</div>
<div class="page" title="Page 1"> </div>
<div class="page" title="Page 1">Like NSW, Victoria is anticipating a surplus in 2015/16 which, if realised, will mean that it extends its run of surpluses that began in the mid-1990s.</div>
<div class="page" title="Page 1"> </div>
<div class="page" title="Page 1">Strong growth in property transfer duty revenue is offsetting some weakness in income and consumption-based taxes such as payroll and gambling. </div>
<div class="page" title="Page 1"> </div>
<div class="page" title="Page 1"><a href="/images/2015/08/05/Screen%20Shot%202015-08-05%20at%2012.39.32%20PM.png" target="_blank">Click to enlarge</a></div>
<div class="page" title="Page 1"> </div>
<div class="page" title="Page 1"><img src="/images/2015/08/05/Screen%20Shot%202015-08-05%20at%2012.39.32%20PM.png" alt=""></div>
<div class="page" title="Page 1"> </div>
<div class="page" title="Page 1"><a href="/images/2015/08/05/Screen%20Shot%202015-08-05%20at%2012.39.42%20PM.png" target="_blank">Click to enlarge</a></div>
<div class="page" title="Page 1"> </div>
<div class="page" title="Page 1"><img src="/images/2015/08/05/Screen%20Shot%202015-08-05%20at%2012.39.42%20PM.png" alt=""></div>
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po-LsXgBTHBmX

Property purchases drive state government surplus: Gareth Aird

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<p><span>The NSW government is selling eight properties in Sydney and major regional cities through Burgess Rawson auction on December 8.</span></p>
<p><span>All are on long leases of 5 plus 5 plus years with the tenant paying all outgoings.</span></p>
<p><span>The rental increase is a fixed 3%.</span></p>
<p><span>Net incomes range from $23,445 per annum to $335,760 per annum.</span></p>
<p><span>The properties are at Bathurst (Robin Hill), Cessnock, Deniliquin, Grafton, Mittagong (Welby), Penrith, Unanderra (Wollongong) and Tweed Heads.</span></p>
<p><span>Service NSW, and the remnants of the RTA are the typical tenants.</span></p>
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j.ballantyne1990-6AQqhLzZaK

NSW government selling eight properties through Burgess Rawson auction

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<div>
<p>The NSW Government is set to sell its Land and Property Information (LPI) unit in 2016.</p>
<p>NSW has JPMorgan undertaking a scoping study on the sale, according to the Australian Financial Review column, Street Talk. </p>
<p>LPI provides all mapping, titles and other related land information services for NSW.</p>
<p>While the sale of the state's LPI would be the first sale of its kind in Australia, Victoria and South Australia are also consider selling their own land titles offices. </p>
</div>
<div>
<p>The AFR suggest that the NSW LPI is likely to be worth $500  million.</p>
<p>In 2014-15 some 900,000 plus dealings were lodged for registration, marking a 6.7 per cent increase on already strong volumes in the previous financial year.</p>
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NSW LPI to be sold with $500 million hopes

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<p>The Aussie Home Loans founder John Symond, in an interview with Ross Greenwood on 2GB's Money News, has lashed out at the mooted changes to negative gearing.</p>
<p>Ross Greenwood suggested that he was surprised by the Labor's strategy of only allowing negative gearing on new homes, which was met accord from John Symond.</p>
<p>"Ross, can you imagine?"</p>
<p>"Let's say they introduce that legislation - only new housing - the day you exchange contracts on a new home, it immediately becomes an old home and guess what, it will drop by at least 20 percent in value, and who's going to walk in to that one?"</p>
<p>Greenwood stated that house prices seem to be resilient around the country with investors not shying away from the property markets at the moment.</p>
<p>"The markets have had a bit of a kick up in the last few weeks, but who knows the real reason," Symond said.</p>
<p>In response to Ross suggesting any big tax changes will change the mood and the direction the money flows, John offered an alternative view.</p>
<p>"Conversely I think a lot of people think I better get in now before any changes come in because they probably won't be retrospective I probably better buy a property now."</p>
<p>"Certainly if the government introduced anything that was perceived to be significantly adversed it would prick the balloon of the housing market and that's for sure," he said.</p>
<p>John said his concern is if they scare away the mums and dads from their negative gearing on their housing.</p>
<p>"The average Australian understands housing and they try and build up a nest egg for future years, and they'll run a mile," he said.</p>
<p>"Everyone will be too scared."</p>
<p>"Imagine what that will do to the real estate market."</p>
<p>"Five trillion dollars in asset value for Australian's as a buffer for the future and a government could be so dumb to blow that up."</p>
<p>He said that we already have a shortage of housing in most capital cities.</p>
<p>"Imagine you being a developer, I'd run 100 miles per hour."</p>
<p>Ross Greenwood said that we need to encourage people to build houses with the population projections.</p>
<p>The population is expected to reach 35 million people between 2050 and 2060, with Sydney and Melbourne to have eight million people each and Brisbane and the Gold Coast to have four million.</p>
<p>John said it will have the opposite impact.</p>
<p>"They are really playing with dynamite here and I hope to goodness they don't come up with some crazy idea and totally destabilise the one industry Australia is relying on."</p>
<p>"They can totally blow it up and I'm amazed that they're even talking about it," he said.</p>
<p>Symonds said he hadn't been speaking to many politicians however thinks they are all clutching as straws.</p>
<p>"They got frightened off with the GST and now they're looking at tinkering with super, they're tinkering with negative gearing and these are areas that impacts the vast majority of working mums and dads or retirees."</p>
<p>"I just think they're desperate."</p>
<p>"Unfortunately the tax system has been busted for decades and it hasn't been addressed."</p>
<p>He suggested that every time they have a look at a particular area they get scared.</p>
<p>"I think we're in no different position than we've been in for the last 20 years with a flawed tax system that just doesn't work."</p>
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jrobinson-rf4aSBido9

Expect values to drop 20 percent under Labor negative gearing: Aussie John Symond

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<div>The Office of State Revenue is committed to the NSW Government’s target of having 70% of transactions conducted digitally by 2019.</div>
<div> </div>
<div>One of our digital services, Electronic Duties Returns (EDR), allows authorised agents to process a wide range of Duties transactions from their office.</div>
<div> </div>
<div>This service also allows solicitors and conveyancers to seamlessly integrate with e-Conveyancing platforms and services.</div>
<div> </div>
<div>Currently, some legal firms continue to lodge documents for assessment that could be done via EDR, this is unsustainable.</div>
<div>
<p>Commencing 1 July 2016, conveyancing documents, which can be processed through the EDR system, will no longer be assessed by the Office of State Revenue.</p>
<p>This is the first step of the digital transformation for property with more to come in 2016 and through 2017.</p>
</div>
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jonathanchancellor-7SQnKwU6yx

Property 101: Changes to NSW Office of State Revenue conveyancing document lodgement service

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<p>The architect Eugene Marchese has emerged as one of the buyers in the State Government's Miller Point terrace selloff.</p>
<p>He's secured a 1875 Victorian Italianate terrace <a href="https://www.realestate.com.au/property-house-nsw-millers+point-122044050" target="_blank">for $3.2 million</a> with wife Joanne.</p>
<p>Part of the Winsbury Terrace row, the property was advertised as requiring a complete restoration when offered by McGrath selling agents Peter Starr and Lorraine Crawford.</p>
<p>The three storey, four bedroom home is a 5.7 metre wide terrace on a 154 sqm Kent Street block with views over the Harbour Bridge and Observatory Hill.</p>
<p>So far the government has sold 91 properties ranging from $1.55 million to $7.7 million.</p>
<p>This article was first published in the Daily Telegraph.</p>
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