Pain or gain? The areas that will feel the impact of the budget
The thing about federal budgets is that the repercussions take time to become visible.
On budget night and in the days that follow, we get the big picture stuff. Well, most of it anyway. Joe Hockey’s budget speech managed to overlook the biggest single item of all: an $80 billion decimation of funding to the states for education and health.
Did he forget? Or did he lack the gumption?
The devil, as always, is in the detail – and that takes time to become known. We’ll still be hearing about newly-realised consequences a month from now.
This week the high school attended by my teenagers told students about the exponential rise in the cost of attending university. The message was: work harder and get a scholarship. Otherwise, unless your parents are rich, you won’t be able to afford university.
I’ve just read that community providers will have to scrap plans for 3,500 affordable homes in Sydney, a place that could do with a few more, because the federal government has cancelled funding. The Commonwealth was to provide 70% of the cost but that was axed in Joe Hockey’s budget.
But he does have $50 million to donate to resources companies wanting to establish coal mines in Victoria’s Latrobe Valley.
Many investors love to invest in towns boosted by mining ventures, the volatile nature of those markets notwithstanding.
But given the recent history of companies seeking government handouts to start mining ventures based on new technologies in the Latrobe Valley, I wouldn’t be rushing out to invest in Traralgon or Morwell just yet. Like their predecessors, they’ll probably never happen.
I’m struggling to understand the philosophy behind the federal government’s spending priorities. It seems that “the age of entitlement” is over, unless you’re a poor starving mining company.
The impact on Canberra’s economy and property market from this budget will become more and more apparent as the details become known.
It’s another blow for Canberra’s struggling property market, but potentially a major boost to accommodation demand in Gosford.
Not only will the national capital take the brunt of the cuts to public service jobs, but there will be further impacts on the relocation of jobs from Canberra to other, more politically-deserving, regions.
For example, 600 Commonwealth public service jobs are being moved from Canberra to Gosford in New South Wales.
It’s another blow for Canberra’s struggling property market, but potentially a major boost to accommodation demand in Gosford.
Gosford has had a topsy-turvy market in the past decade, with peaks matched by troughs and, as a result, a poor long-term capital growth rate. But it’s currently immersed in another up-cycle, having caught the wave from Sydney, but remains affordable – with median prices of $325,000 for houses and $280,000 for units.