A NSW budget based on monkey business

A NSW budget based on monkey business

The most important fact that resonated with me when the NSW Fudge-it was announced this week, is that we are simply paying way too much tax. Last December the treasurer, “Cost – ya” plenty, announced that by his calculations, the budget surplus for the current financial year would come in around $506 million. More than his previous calculations in June 2007 (that the surplus was likely to come in at $376 million) the budget surplus for 2007/08 is now revised up to $700 million. Quite amazing that previously “Cost-ya” thought (hoped) that in 2009/10 the surplus would climb to $730 million. We obviously have a treasurer who either can’t count or has no idea what is actually happening with the NSW economy. Leaving GST aside (the tax supposed to reduce taxes – yeah right) the NSW government has done beautifully out of “P’s” – that being property and payroll tax. In property the “P’s” refer to position – position – position, while payroll tax is a bonanza when the economy runs at record low unemployment figures.

A brain dead Fudge-it that identified what we already knew. The NSW government infrastructures being education, health and transport (already broken) are now going to be renovated (not before time) with a record $57 billion (a record $13.9 billion over the next 12 months) infrastructure budget. Forward thinking ? Nope, acknowledgement that NSW consumers, remain sick and tired of ongoing failed governmental infrastructures which today, remain in complete disarray.

Payroll tax reductions (big deal) of $1.9 billion (which were supposed to happen in 2000, when GST was first introduced )where tax will be reduced from 6 per cent to 5.75 per cent from January 1, 2009. Then to 5.65 per cent from January 1, 2010 and to 5.5 per cent from 2011 and wages for businesses won’t be higher in three year’s time? Smoke and mirrors, especially as Queensland payroll tax is now 4.75 per cent and Victoria 4.95 per cent.

Then we have Stamp Duty on real estate acquisitions – no reductions here because it is a NSW government “cash cow”. Land Tax was also ignored, so rents will continue to rise as investors are not offered any incentives to invest. Crucial markets that remain in ignore mode. Recent reports identified that Sydney’s population will grow by approximately 1 million people by 2021 as a result of the Rudd Government’s immigration program.

What a train crash this will be with the Federal Government driving new arrivals and the NSW Government discouraging investors where residential vacancy rates (below 1 per cent) will shortly have real estate agents displaying “no vacancy” signs.

The Bank West Key Worker Housing affordability report released this week, sent alarm bells ringing with the announcement that nurses, teachers, fire fighters, police and ambulance officers – have been priced out of almost all Sydney residential markets. The report identified that 93 per cent of local government areas (LGAs) were well beyond the key workers in 2007. The measure is where median house prices are more than five times a workers annual earnings. The top 10 most unaffordable areas identified Sydney (with 6 LGAs) with Mosman being the most unaffordable suburb. With Mosman surging upwards with a $2 million plus median, this is 32 times a police officer’s annual earnings and 40 times greater than that of a nurse.

It remains abundantly obvious that politicians never read these reports. First and foremost a property market without investors equates to terminal results where vacancy rates head to zero per cent. Record high petrol prices, record high rents with record high taxes. While Queensland may be “beautiful one day and perfect the next”, NSW is fast becoming for some, as the Bank West affordability report identified, simply too expensive compared to other states and territories. With the NSW government well down the path of selling off its ownership of electricity, it could very well become a case of “the lights are on and nobody is home.”

Interesting news that a penthouse in Potts Point (yet to be built) sold by Richardson & Wrench Elizabeth Bay this week for $20 million – an Australian record. This equates to $37,000 per square metre. Earlier this year, Richardson & Wrench Mosman & Neutral Bay set a new Mosman record for an off – the plan penthouse sale at $22,000 per square metre. The record was broken this week with a Balmoral apartment sale at $28,600 per square metre.

No doubt – security blocks! However cities simply can’t survive without nurses, teachers and emergency service workers. There again governments can’t survive without taxes. The workers will leave well before taxes are reduced which simply re-affirms the saying, “offer peanuts – you get monkeys”. Cheers ^__^

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