The NSW Budget is the perfect partner to the Commonwealth Budget’s focus on the ‘demand side’ of the economy, ensuring a boost to the ‘supply side’ at a state level.
The NSW Government and Treasurer Dominic Perrottet describe the Budget as a two-pronged approach, with one aspect being the health response and the construction, redevelopment and expansion of social infrastructure such as primary healthcare facilities, hospitals and healthcare precincts.
The discreet economic response constitutes the second key aspect of the NSW Budget, which targets measures in relation to planning, tax, health and education regulatory change and reform, in addition to economic infrastructure. These steps are designed to provide productivity beyond COVID-19 recovery, positioning the state even more competitively.
An announcement was also made to phase out stamp duty, which has been declared a barrier to housing mobility and property investment for years. Several measures should ease the transition, including price thresholds which stop large landowners all switching at once to land tax and causing a drastic fall in revenue.
There remain questions around how the stamp duty reform will be rolled out, which will underpin its success. For instance, what will be the impact of the disincentive to invest in commercial property, which has the highest rate of 2.6% of unimproved land value per year? In contrast, residential owner occupiers will be charged the lowest rate of $500 plus 0.3% of unimproved land value per year. Our other insights on stamp duty reform can be viewed here.