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Creation Date: Tue, 18 May 2010 GMT

Budget 2010: surpluses, sustainability positive for property

The Rudd Government's third Budget welds key elements of the Henry and managed investment trust reviews with a promise to deliver a swifter transition to budget surpluses, according to the Property Council of Australia.

"While the budget lacks the infrastructure spending fireworks of previous years, it commits to a $5.6 billion State Infrastructure Fund and fast tracks several existing projects," says Property Council chief executive, Peter Verwer.

"The budget focuses on a smooth transition from GFC stimulus spending to stronger private investment."

"The increase in the superannuation charge to 12 per cent, along with cuts in company tax, should lift business investment over the medium term."

"The Budget also redirects funds from the stalled CPRS to a bigger focus on renewables and energy efficiency," says Mr Verwer. "The Government has announced a $652 million Renewable Energy Fund, which will also encourage greater energy efficiency and the use of renewable technologies in buildings."

The Property Council also welcomed measures to improve savings and banking competition, with a 50% discount to interest on deposit accounts and a reduction in withholding taxes for financial institutions.

"We applaud the Government's move to reduce withholding tax on interest, as this will strengthen our banking sector and reduce the cost of borrowing," Mr Verwer says.

The Property Council also welcomed the establishment of a Critical Skills Investment Fund, which is part of a broader Skills for Sustainable Growth Strategy.