What does Turnbull victory mean for property

By Cliff Tarr

Malcolm Turnbull claimed victory on Sunday, with it appearing likely he will hold onto a wafer-thin majority of 76 seats. But if the last week was difficult for Turnbull, his real problems may just be starting.

The election has shown that Turnbull does not have broad voter appeal. Peter Dutton warned on the weekend that the government could not have a “tin ear” to voters’ concerns about budget reforms. Turnbull must use his considerable oratory skills and intellect to bring the country along with him. Prime Ministers can and do grow into the role, and this is what voters will be looking for now from Turnbull.

Bill Shorten and Turnbull have raised the prospect of a more conciliatory approach to policy in the national interest.

Shorten said on the weekend, “where there is common ground, we will work very hard to accomplish it,” while Turnbull said voters expect the parliament to work together “to deliver good government, wise legislation and sounds policies.”

That being said, Turnbull is not going to have an easy time seeing his agenda through.

On the bright side, having an election outcome removes some of the uncertainty of recent weeks in property markets, and could provide a short-term fillip.

But with the threat of a credit-rating downgrade looming, the Prime Minister now has to ‘fix the budget’ with a tiny majority in a difficult government.

Turnbull is unlikely to get his business tax cuts passed. He might find approval in a watered down form, say the initiation 1% tax cuts for businesses with turnover of less than $10 million, but the scaled up approach he is was proposing is unlikely to get through.

Labor’s negative gearing proposal had popular appeal and could improve the budget position, but the Turnbull government is unlikely to tamper with existing arrangements.

The housing and construction sectors are the bedrock of the economy at the moment, and are funded largely by investors, including overseas investors. Turnbull needs to explain this relationship to the public, so they don’t just believe he is pandering to rich investors.

Turnbull yesterday said he will reintroduce the Australian Building and Construction Commission bill to stamp out union corruption, but he will have to work hard to have it passed.

Turnbull will also need to reassure foreign investors that Australia is still a good place to invest, despite the rise of Pauline Hanson and Nick Xenophon’s protectionist policies.

Turnbull has already elevated the national debate about urban design, appointing a Minister for Cities, but people need to see the results in the form of improved public transport, more homes, and strong communities. That won’t happen overnight.

Source: The Real Estate Conversation July 16

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