A vote of confidence: Victorian Election - why state needs growth

WHEN Victorians hit the ballot box on November 28, one overarching theme should be front and centre: the state needs to rediscover its appetite for investment, growth and getting things built. 

This is the view of the Property Council of Australia but one that could easily define the state election. 

In an economic climate dominated by higher interest rates, a housing downturn and global uncertainty, Victoria is well placed to begin the process of building for the future. 

Matthew Kandelaars, Property Council Australia policy and advocacy executive, urged the next government to enact a “straightforward economic blueprint” that focused on “competitive property taxes, infrastructure that unlocks growth and a planning system that delivers decisions, not delays”. 

“Victoria is in a fierce contest for capital, jobs and talent. Right now, we’re making it too easy for investment to go elsewhere,” Kandelaars said. 

“You cannot tax your way to prosperity, regulate your way to more housing or build an economy on the back of stalled projects. 

“Whoever forms government needs to put investment back at the centre of Victoria’s economic agenda.” 

As campaigning continues in the final weeks before election day, both sides of politics have made pitches to the property sector as housing remains a major battlefield. 

The incumbent Labor government, seeking a fourth term in office, has showcased its pledge to build 25,000 homes across Melbourne and regional Victoria.  

Under the plan, the state would provide $500 million in land, while the federal government would cover development and construction costs via $499 million in grant funding. 

Victorian Labor has also promised to slash its land tax surcharge on overseas investors who construct affordable housing in the state.  

The change will give developers more time to sell and lease their stock and support further home builds, the government said. 

The Liberal-Nationals coalition, in its pitch to voters, has also vowed to supercharge housing supply. 

It wants to fast-track homes in identified growth areas, rejuvenate Melbourne CBD as a place to live and work and bolster liveability in the capital’s middle and outer suburbs. 

It also wants to work closer with local councils to accelerate growth in the state’s regions. 

Kandelaars warned Australia’s 1.2 million homes Housing Accord target remained in doubt, despite a modest lift in completions. 

As part of the accord, Victoria has a target to build 800,000 new homes — 80,000 a year — statewide by 2034.  

Looking ahead, Kandelaars backed a scrapping of the absentee owner surcharge and said the state’s windfall gains tax should also be wound back.  

“It adds cost, complexity and uncertainty to projects that are already fighting to get off the ground,” he said. 

“The cumulative weight of land tax, stamp duty, surcharges and development charges demands a fundamental reset.” 

On the plus side, he said there were “encouraging signs from both sides of politics that the penny is finally dropping on property taxes and investment. 

“Labor’s willingness to review foreign investment surcharges and provide targeted tax relief is a welcome recognition that the current settings need work,” he said. 

“The coalition’s commitments on property tax reductions, faster planning and growth infrastructure are also constructive.” 

However, he called on the next government, whether Labor or coalition, to go further with reform. He said more needed to be done to get homes, offices and warehouses built quickly. 

“We’ll judge all parties on their willingness to make Victoria competitive again,” Kandelaars said. 

Holding back whoever formed government, he said, would be the state’s balance sheet. 

State finances, supported by property taxes, were under “extraordinary strain” at present. 

“At the same time, Victoria is competing for investment with jurisdictions offering lower costs, greater certainty and fewer barriers to getting projects moving,” he said. 

“Capital has choices. It doesn’t have a sentimental attachment to Victoria.  

"And with the state’s finances under pressure, the old reflex of reaching for another property tax is increasingly counterproductive.” 

He said the next government needed to face up to “a basic economic truth”. 

“The homes, jobs and infrastructure Victoria needs cannot be delivered without a thriving private sector.” 

As the election looms, conveyancers in the state are calling for industry reform to be high on the agenda in the next parliament, irrespective of which party takes office. 

AIC Victoria said urgent action was needed from whichever party prevailed, including on controversial referrals paid to real estate agents. 

The fees, paid by some conveyancers, are legal in NSW, Victoria, Queensland, the ACT and Northern Territory but are banned in Western Australia, South Australia and Tasmania. 

The practice has long drawn claims of conflicts of interest, with critics arguing they prioritise business over conveyancer knowledge, skills and quality of service.  

“We want that absolute prohibition,” said AIC Vic strategy lead Shakila Maclean, adding that the referrals remained a common feature of the Victorian industry. 

“We need meaningful reform,” she said. “It compromises independent professional advice.” 

Maclean also urged an update of state conveyancing laws. 

The Conveyancers Act has been in place for 20 years and was no longer fit for purpose given changes that had taken place in the industry, she said. 

“We need to make sure that legislation adequately reflects responsibilities, risks of today's licenced conveyancers, compared to when it was put together in 2006,” Maclean said. 

“You can call it modernisation,” she added.  

“We weren't even doing electronic settlements 20 years ago, there was no AML/CTF, there was no capital gains withholding.” 

The issue of mandatory continuing professional development for conveyancers, set to begin in April next year, also needed to be on the radar, according to AIC Vic. 

Maclean said it was important the next government ensured the CPD was not just a “tick the box exercise” but led to a “measurable improvement in professional competence”. 

In the lead up to voting day, Maclean said the peak body had been in contact with both Labor and the coalition but had yet to have talks with One Nation. 

Opposition consumer affairs spokesperson Jade Benham, a Nationals MP, had shown particular interest in acting on conveyancer issues, she said. 

“She's been very engaged with Victorian conveyancers", Maclean added. “She really gets it.”