The budget was another exercise in political dishonesty

The budget was another exercise in political dishonesty
The budget was another exercise in political dishonesty

Nothing in the federal budget directly impacts on real estate, notwithstanding tinkering with NRAS and First Home Saver Accounts.

But indirectly the consequences will be considerable – some good and some bad.

The first point is that there are no changes to negative gearing tax benefits. The government realises this would hurt rather than help the nation.

It seems that every year before budget time there is an attack on negative gearing from people who see only their vested interest or political viewpoint – and fail to think through the consequences.

So the only potential nasty for the real estate industry has failed to occur, yet again.

Indirectly, the biggest impact on property markets nationwide will come from the dent to confidence. The overall perception about this budget is likely to be negative. The changes will hurt a lot of households and cause belt-tightening.

Despite what the government claims, the burden is not evenly spread. The mining industry gets special treatment and the most vulnerable take the biggest hit.

Confidence is also damaged by the betrayal of trust that is sadly so common in politics. The public is fed up with broken promises and they’ve just been whacked again.

Even more frustrating is that political leaders lack the integrity to admit they’ve been deceitful. They compound dishonesty with further dishonesty.

How refreshing it would be to see a politician respond to a direct question with a direct answer. Treasurer Joe Hockey looked weak and shifty under the blowtorch applied by ABC TV presenter Sarah Ferguson. Why not just admit that election promises were broken and move on?

Shadow Treasurer Chris Bowen was no better when questioned about which elements of this budget the Opposition will seek to vote down. I thought Ferguson decimated both Hockey and Bowen, by insisting on honest responses to direct questions.

So, a major dent to public confidence, and that doesn’t help the real estate industry.

Nor will the dramatic trimming of the public service, with greatest impact on Canberra, a market that is already struggling.

On the other hand, the industry will be boosted by the spending on transport infrastructure – if the undertakings are honoured. That’s the biggest “if” in politics.

Spending on new transport infrastructure is the biggest game-changer in residential real estate. If Badgerys Creek goes ahead, and the road and rail upgrades are implemented as suggested, there will be massive consequences for real estate. So too if the $11 billion WestConnex project starts construction next year, as indicated by Hockey in his budget speech.

There’s a long list of transport infrastructure projects as part of a $40 billion budget package, with strategic projects across most of the states and territories. But will they be delivered? And, if so, when?

Right now, I wouldn’t believe federal politicians (on either side of politics) if they told me today was Thursday.

You can contact Terry via email or on Twitter.

Photo courtesy of Carmello Fernando/Flickr/Creative Commons.

Terry Ryder

Terry Ryder

Terry Ryder is the founder of hotspotting.com.au.

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Terry Ryder Budget

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