Property and Construction Forum key messages 17 October 2018

Welcome and update

The meeting was facilitated by John Clingan from the ATO who welcomed the group. Joanne Casburn introduced the agenda.

Current and future trends in the residential property market

Ryan Farrow, Senior Research Analyst from the Property Council of Australia (PCA) provided a presentation on current and future trends across Australia in the residential property market.

Ryan reported a cooling across most markets and provided details on changes in values across capital cities and annual rent changes.

Industry sentiment is that price growth and construction is expected to slow as credit availability continues to tighten.

In a residential update of market drivers it is expected that a slower rate of sales and reduced buyer numbers will result in reduced dwelling prices.

For a copy of this presentation please contact the Secretariat.

Issues for small business in the property and construction industry

Jill Lawrence and Annette Conroy from the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) discussed a number of issues including the importance of Small Business to the Australian economy. Small Business contributes 35% to GDP, employs 44% of Australia’s workforce and 70% are family enterprises.

The ASBFEO assist and advocate for Small Business. Their work includes research, advising ministers, providing direct 1:1 support and alternative dispute resolution.

The Ombudsman has provided submissions to the Black Economy Task Force as well as the Commonwealth Review of Security of Payments Laws (Murray) and the NSW Deemed Statutory Trusts – Building and Construction review.

Issues outlined include illegal Phoenixing, Deemed Statutory Trusts and increasing integrity in Commonwealth procurement.

For a copy of this presentation please contact the Secretariat.

ATO update on WebGuidance and Head Contractor projects

Joanne Casburn discussed why the ATO is taking an industry approach to property and construction and some of the projects being undertaken to support compliance. She provided an update on the Head Contractor project where the ATO is focussing on influencing large head contractors to improve compliance of their subcontractors. We are supporting those head contractors by providing a risk profile of their subcontractors as well as developing a best practice procurement guide.

Some of the risks we are seeing in the subcontractor population are:

• Outstanding lodgment of income tax returns and business activity statements
• Incorrect or non-existent ABN and GST registrations when required

Phoenix

The technical session provided by Dean Karlovic included discussion of the Mere Realisation Doctrine; multiple projects through multiple entities and examples from the Consultation Paper.

For a copy of this presentation please contact the Secretariat.

Illegal phoenix in the property and construction industry

Julie Eldridge from the ATO Phoenix Taskforce advised the group that the cost of illegal phoenix behaviour is between 2.85 and 5.13 Billion dollars per annum. Illegal phoenix behaviour creates an unfair competitive advantage; affects innocent businesses and also erodes community trust and confidence.

The ATO is working with other agencies as part of the Phoenix Task Force to combat the illegal behaviour.

Housing Industry Association (HIA) research on current and future trends in the industry

Keith Ryan from the HIA provided a residential building update. He reported that labour market conditions have improved; low interest rates are supporting capital investment, and the housing cycle is moving further from the peak.

He predicted a good outlook for the Australian economy; a reduction in new home builds; the detached home sector outperforming the apartment sector, and a continued variation of performance around the country.

For a copy of this presentation please contact the Secretariat

Next meeting

April 2019 by video conference. We will contact members to discuss agenda topics.

Attendees

Apologies