Your top WA budget questions answered: Our reporters explain the details
By Hamish Hastie and Peter Milne
WAtoday business reporter Peter Milne and state politics reporter Hamish Hastie. Credit: WAtoday
We spent hours on Tuesday going through the budget papers. We also asked the treasurer, premier and a host of other government officials questions about the decisions in the WA budget.
But we’re not the only people wondering about the budget, so let’s answer some of your questions and unpack what it means for you.
Over the past few days, you’ve been sending through your burning budget questions. And here to answer them is WAtoday state politics reporter Hamish Hastie and business reporter Peter Milne.
Single people
Stacey asks: What’s in it for single people?
Well, with the premier delivering a budget for “families, seniors, tradies and renters” you may well feel left out, especially if you are also a young office worker with a mortgage. So there is nothing specifically for the unattached, but if it is any consolation you will get more per person from the $400 power bill credit than the elderly chippie with six kids renting down the road.
Stamp duty
Rick asks: I am really hoping that the First Home Buyers Stamp Duty concession threshold will be raised as it is near impossible to find any house for sale under $530,000. Even if it was pro rata so that no stamp duty payable up to $530,000 is better than a concessional amount on amounts over $530,000. Wishing and hoping to be able to get on the property ladder albeit with a huge mortgage.
Rick’s hopes for the thresholds for the first home buyers stamp duty to be raised have been answered.
Now established homes purchased by first home-buyers costing less than $450,000 will attract no stamp duty, up from $430,000. This amounts to a $15,390 saving for a $450,000 house. The concession will taper off for more expensive homes, with no discount if the place costs more than $600,000 instead of the previous limit of $530,000.
Unfortunately, the nudge up of thresholds that have not moved for a decade fall a long way sort of matching house price inflation since 2014.
Steve asks: What about a reduced stamp duty exemption for all? I’m in my 30s and would like to move but the cost of stamp duty is a factor in the purchase of a new property. My parents would like to downsize and are in a similar situation. If stamp duty was reduced, more properties would change hands. More people in the right type of homes for them at that point in life.
None of this helps homeowner Steve in his 30s, whose desire to move is made harder by stamp duty. His parents wishing to downsize are in the same boat. However there is no relief for homebuyers outside the lucky 5000 first timers predicted to benefit from the changed thresholds for first home buyers stamp duty relief. Sadly the spare rooms at Steve’s parent’s place may remain empty while WA struggles to house a population that jumped by 94,000 in just 12 months.
Matthew asks: How much are the changes in first home buyer stamp duty concessions going to cost the government over the forward estimates? How does this stack up against the increase in transfer duty revenue over the forward estimates? The revenue has increased significantly, and likely to increase further, given the rapid increase in the Perth property market. And, it seems the increase in first homebuyer thresholds is nowhere near high enough (since last reviewed a decade ago!) Why is more now being done to assist first home buyers who now are completely priced out of the market?
Matthew is a concerned mortgage broker on the coalface of the tough property market and I think his concerns will dawn on first home-buyers soon. Off the bat, the stamp duty concessions will cost the budget $82 million over the next four years, which is a drop in the ocean of the $2.8 billion that the tax reaped the state government this year alone. This reflects a sharp rise in residential property prices, while revenue from large commercial transactions is anticipated to remain at elevated levels seen in 2021-22 and 2022-23. I suspect as people start thinking about accessing the exemption and concessions and find they can only buy dodgy shacks or homes in far-flung places where employment options are minimal it may cause a political headache for this government.
Homelessness
Michelle asks: What assistance and remedy will government provide for the homeless, and resources for services to support them? The physical and mental health of these people is deteriorating, with a negative impact on them, service providers and the broader community. Surely our society is better than this. These organisations ought to be heard, not just industry lobby groups who have a vested interest
The ultimate victims of the housing squeeze are of course the homeless.
Michelle is concerned about their physical and mental health and wants to know how the government is assisting organisations that support them. The good news is that now $92 million will flow to more than 120 services dealing directly with homeless people. Kath Snell, chief executive of Shelter WA, welcomed the extra backing but thought more could have been done to meet the scale and urgency of the crisis.
“Our sector has been under enormous pressure with unprecedented demand, and this will take some stress off frontline staff, and directly support those that are in dire need of support and services,” she said.
The Cook government will also spend $400 million on social and affordable housing. Snell welcomed the move but estimated it would only provide about 1000 new homes.
TAFE
?The Doktor’ asks: What does the budget contain in regards to adequately funding TAFE? My son is a 2nd year apprentice yet has only had three weeks of face-to-face TAFE time in that whole period. TAFE is in disarray.
Undoubtedly, the TAFE sector is more flushed with cash than it has ever been. A quick comparison of the Department of Training and Workforce Development spending in 2016-17 to now shows an increase of $635 million to $1 billion. That is an extraordinary increase but unfortunately has come too late to avoid the skills issues. The Doktor’s question touches on a problem faced right across the public sector – it cannot employ the frontline workers it needs quickly enough.
There are currently 2600 TAFE lecturers, which is only 100 more than 2021, despite major investments occurring over that period in construction training as well as schemes like the fee-free TAFE on offer. That is probably why their son is struggling to get face-to-face time. Hidden in the budget the department has $8.7 million set aside for the next three years for a return to industry program to get lecturers back into the system and an additional $3 million in 2024 to extend an attraction and retention incentive for regional lecturers. How successful that will be when lecturers can earn double on the mines remains to be seen.
When it comes to initiatives aimed at attracting more apprentices to TAFE the Chamber of Commerce and Industry’s chief economist Aaron Morey seems happy.
“WA’s ongoing skills shortage and housing supply squeeze will be assisted by a $52.3 million program to encourage apprentices into building and construction trades with $1000 cash bonuses and equipment allowances, and $21 million to subsidise the wages of building apprentices,” he said.
Climate
Dave asks: Climate crisis is our biggest threat to health and welfare – how is that addressed?
Reaction to climate crisis spending depends very much on where you sit on the spectrum of the climate debate. Fossil fuel businesses are happy they can continue their business while environmental groups say it doesn’t reflect the existential threat climate change poses. This budget, like Labor’s previous budgets, has plenty of spending on electricity infrastructure to deal with more renewables on the grid and continuation of its Climate Action Fund which was established three years ago. In 2023-24 about half a billion dollars were drawn from that fund to pay for things like the Kwinana Big Battery and support the transition away from native forest logging. In 2024-25 $214 million will be drawn from the fund to pay for more decarbonisation work and for planning and research to understand how climate change will impact state resources like water.
The environmental movement was unhappy with the budget.
Anna Chapman from the Conservation Council of WA said after WA – the only state without a target to reduce emissions by 2030 – experienced its hottest and driest summer on record there was little in the budget to prepare for and reduce the damage to come.
Hydrogen
?Enviro’ asks: How much is spent/wasted in hydrogen exploration?
An unnamed reader who wants to know how much is being “wasted” on exploring for hydrogen will be pleased to know the answer appears to be zero, but amended legislation passed in March does now at least allow for it. Hydrogen is rarely found underground and is normally made from coal or gas, emitting vast amounts of greenhouse gases. There is a hope that WA can be a player in “green” hydrogen, made by extracting the element from water using electricity generated by solar and wind, and the budget has some backing for that plan, with $15 million to go to establishing a hydrogen hub in the Pilbara
A traveller’s dilemma
Megan asks: Land Tax is currently not pro-rated! If I sell my property 1st July I have to pay a full year’s land tax. (If someone purchases it and it’s an investment, they too pay land tax on the same property for the same year. (Double dipping?) We currently pay $1900 land tax on our home as we have it rented out while we travel. However, if we didn’t rent it out looks like we’d be entitled to $5000 ?bonus’. If only we could afford to not rent it but at $4500 council rates and over $2000 water rates before a drop is spilt plus $1900 land tax, we can’t. Our tenants get the elect rebate, once again we get nothing. We’re currently sailing around Australia. Boat rego in WA is over $600 a year, in Tasmania where we’ve been rego is $95, and we actually get services and facilities for it that we don’t in WA, our facilities are woeful.
Megan is unhappy about a few issues. One is her annual $1900 land tax levied while she is not an owner-occupier. The tax levied on the value of land someone owns, unless they are living there, is predicted to bring in $987 million next financial year, a jump of 6.5 per cent, mainly due to a rising land prices.
There are no changes in the budget to help Megan with her land tax, but there is relief for another concern that she is paying more than $600 a year to register her boat, despite WA’s “woeful” facilities. In comparison, Tasmania, where she is now, charges less than $100 and provides, in her opinion, much better facilities for boat owners. Fortunately, the budget allocated $78 million to improving boat facilities at Onslow, Jurien Bay, Woodman Point and Albany.
Megan noted that her tenants will get the $400 power bill credit but “once again we get nothing.” The credit is applied to the bills of Synergy and regional power provider Horizon so landlords, who are not paying for any power, do miss out.
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