<html><body>
The federal government should offer a firm commitment to tackle key issues on tax reform in order to strengthen venture capital in Australia, according to Australian Private Equity and Venture Capital Association chief executive Yasser El-Ansary.
Specifically, El-Ansary says reforms are needed to the Venture Capital Limited Partnership regime, which is currently producing outcomes for domestic investors inconsistent with those of non-resident investors.
Such changes were set to be introduced by the previous Labor government and <a href="https://fsi.gov.au/files/2014/04/AVCAL2.pdf" target="_blank" rel="nofollow">endorsed by the Board of Taxation.</a>
“As of about 12 months ago, or even longer than that, there was across the VC industry and understanding that the government at that time was committed to making these changes,” El-Ansary says.
“Then there was a decision in late 2013 to abandon this change.
“It’s a very obvious change that should be put in place as a matter of priority.
“It’s been talked about for so long now that arguments for and against have been made, the technical analysis of the shortcomings have been worked through, not just by those that stand to realise the benefits, but also by the government’s own independent tax review authority.
“There’s many in the industry frustrated by the amount of time it’s taking to convert discussion, debate and analysis into meaningful change.
“I think ultimately it would lead to an upswing of venture capital funding here in Australia.”
Further, El-Ansary says it’s a move that would have very little impact on the government’s budget.
“Our analysis of this issue confirms for us that there is not very significant cost to the government, instead it would be a net benefit for the government because it would generate greater level of activity but does not involve a significant cost to budget bottom line,’’ he says.
Another area El-Ansary would like to see tax reform is employee share schemes. Starfish Venture’s co-founder John Dyson agrees.
“I think improving the tax regime around employee share options, to me that’s a specific issue around tax reform that would be really beneficial," he says.
“Will it mean more competitive companies get funded? Maybe. But it gives the existing companies the best chance of success.”
Dyson criticised the government’s decision to axe the Innovation Investment Fund and is concerned the Entrepreneurship Infrastructure Program, which there is currently very little detail about, will be focused on offering entrepreneurs advice and mentorship.
A statement from Minister for Industry Ian Macfarlane says the new program will bring research and business together to develop and commercialise home-grown ideas and equip small to medium enterprises and the management and business skills to lead and change expansion.
“I think the Innovation Investment Fund program in theory, is a really good program, they had some challenges in the implementation of that program, but the Australian economy is much better off than not having that,’’ Dyson says.
“I see that as a huge disappointment that it’s been axed.
“My view is we have a weakness in the market in Australia when companies are going to raise between $1 million and $5 million.
“I don’t think entrepreneurs want $200,000 and want to have to call up advisers and ask that they think about their app.”
Those concerns are shared by AngelCube co-founder Adrian Stone.
“What we know is that the Commercialisation Australia grants program is gone,’’ he says.
“Replacing that with advice and guidance is a huge step in the wrong direction.
“What startups don’t need is more advice, more consultants, more people telling startups what to do.”
Macfarlane <a href="https://www.brw.com.au/p/investing/industry_minister_full_macfarlane_LGuW2U7RL2dtkJmZyaIW1M" target="_blank" rel="nofollow">told The Australian Financial Review</a> the startup community should hold their fire on the government’s innovation strategy until the results of national competitiveness and tax reviews are in.
The Industry Investment and Competiveness Agenda will examine the issues raised by venture capital and startup groups, which Macfarlane says is not expected to be completed until after July.
This article first appeared on <a href="https://www.startupsmart.com.au/" target="_blank" rel="nofollow">StartupSmart</a>.
Photo courtesy of <a href="https://lendingmemo.com/" target="_blank" rel="nofollow" data-rapid_p="22">Lendingmemo.com</a>.
</body></html>

jake-cSmGT7VXVf

Investors demand tax reform in budget’s aftermath

<html><body>
GUEST OBSERVATION
Treasurer Joe Hockey’s first budget creates a clear path almost to a surplus. Our children will pay much less for current spending. Real political courage was required to get this far.
But the budget also creates problems for the future that will drag on economic growth and hurt the less fortunate. Over the next few years the Abbott government will have to make even tougher choices that both keep the budget in balance and do more to promote economic growth and fairness.
Even in four years' time the budget does not quite balance – and <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2014-05-08/daley-our-bloated-budget-needs-to-hit-the-treadmill/5437904" target="_blank">it should already be balanced</a> given that the economy is not doing too badly. Some of the choices, particularly the timing of the deficit levy and increases in infrastructure spending, seem almost designed to avoid claiming a surplus. The budget ducks the possibility of under-delivering on a surplus, but only by under-promising.
Bracket creep does most of the work of budget repair. Fixed income-tax thresholds and wage inflation will take personal income tax from 11% to 12% of GDP. This is worth about $18 billion in today’s terms. Income tax has not been at these levels since the GST came in.
<img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/48422/width668/7xmtbdzr-1400030990.jpg" alt="">
Real spending reductions and a few tax increases also help to reduce the budget deficit. New decisions will improve the budget bottom line by about $10.5 billion in 2016-17.
It will be the sharpest sustained slowdown in spending since the “recession we had to have” of 1990. Commonwealth spending on health will shrink as a proportion of GDP for the first time in a long while.
<img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/48423/width668/9prfznpk-1400031054.jpg" alt="">
The Treasurer promised the burden would be shared across the community. The budget is clearly designed around this principle, which is likely to make the package <a href="https://grattan.edu.au/publications/news-and-opinion/post/fixing-our-budget-emergency-means-making-the-case-for-change/" target="_blank">easier to sell</a>. Patients, students, families, pensioners, the unemployed and high earners will each contribute $1 billion to $2 billion fairly directly to the bottom line. However, the <a href="https://theconversation.com/age-pension-reform-needed-for-a-fair-sustainable-welfare-system-22313" target="_blank">largest line item in the budget, the Age Pension</a>, will continue to consume more of the Commonwealth budget and national resources, despite some minor tinkering.
<img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/48425/width668/3h3mg82d-1400031107.jpg" alt="">
False economies in the budget
Unfortunately, many of the things helping the budget to surplus will drag on economic growth and well-being.
Co-payments for medical services and pharmaceuticals are likely to lead to more sickness that far outweighs any budget savings. Similar co-payments elsewhere have led to people seeing the doctor less. Some didn’t really need to see a GP, but far more <a href="https://theconversation.com/federal-budget-2014-health-experts-react-26577" target="_blank">missed out on valuable treatment</a>.
The budget also unilaterally tears up the Commonwealth’s promises to help states with the growth in hospital spending. In effect, the Commonwealth has told the states they will have to absorb most of the <a href="https://grattan.edu.au/publications/reports/post/budget-pressures-on-australian-governments-2014/" target="_blank">coming cost increases in health</a> as new and more expensive treatments keep proliferating and the population ages. This doesn’t solve the budget problem, just transfers it to another level of government.
The budget’s reliance on bracket creep is also likely to discourage workforce participation, particularly among women thinking about returning to work who often <a href="https://grattan.edu.au/publications/news-and-opinion/post/to-lift-economic-growth-we-must-cut-the-cost-of-childcare/" target="_blank">take home very little of what they earn</a>. By 2017-18 – after the deficit levy is due to expire – middle-income earners will pay an extra 1.8% of their incomes - $744 a year – in tax. Some will lose family payments on top of that.
Similarly, although bush economists might be attracted by “work for the dole” schemes, and these are likely to reduce claims for unemployment benefits, the evidence shows that these schemes <a href="https://theconversation.com/work-for-the-dole-doesnt-work-but-here-is-what-does-22492" target="_blank">hinder people finding proper long-term jobs</a>. Combined with uncapped university fees and charging real interest for student loans, which may start to deter people from going to university, this budget could reduce how much Australia’s workforce produces in the long term.
The government’s controversial Paid Parental Leave Scheme remains in the budget, although you would need a microscope to find it buried in the budget papers as an “other” variation from the November economic statement. The best one can hope is that it never eventuates – and if the company tax changes that were to part-fund the scheme don’t happen, then the budget will get a collective boost of $4 billion a year. That money could be put to better use making childcare more affordable.
The budget’s main claim to economic responsibility is its new infrastructure spending, about $3 billion in 2016-17. That is smaller than you might think if you listened to the announced package, which conflates spending over a number of years, as well as already announced spending. And the claimed economic benefits may be much smaller than assumed.
Not one of the material projects getting new money from the government is <a href="https://www.infrastructureaustralia.gov.au/coag/files/2013/2013_IA_COAG_Report_National_Infrastructure_Plan_LR.pdf" target="_blank">rated by Infrastructure Australia as “ready to proceed”</a> – indeed not one even falls into their “on the threshold” category. Many are not even rated as projects with “real potential”.
The rigorous independent cost-benefit analysis of projects simply hasn’t been done. Given past experience, we should be sceptical about accepting politicians’ claims that their instincts are a good substitute.
So this budget may reduce the deficit, but it reinforces the need for much better quality policy in future to encourage economic growth and well-being. Better unemployment, health and transport infrastructure policies will be needed. The big reforms, as identified in Grattan Institute’s <a href="https://grattan.edu.au/publications/reports/post/balancing-budgets-tough-choices-we-need/" target="_blank">Balancing Budgets</a> report, will involve tightening superannuation tax concessions and pension eligibility and abolishing negative gearing so that the tax burden is shared more fairly across the community and it becomes easier for our children to buy houses. These measures will all create space to reduce income tax and relieve the burden on low and middle-income earners.
The government has made one courageous decision in this budget: those born in 1965 will need to work until 70 to collect an Age Pension. This is the kind of measure that will both repair the budget in the long term and encourage economic growth. Future budgets will need more of this kind of courage if they are both to sustain the deficit reduction of this year’s budget and ensure long-run economic growth and well-being.
John Daley is chief executive officer at <a href="https://grattan.edu.au/" target="_blank" style="line-height: 1.3em;">Grattan Institute</a>.
Cassie McGannon is fellow, Australian Perspectives at <a href="https://grattan.edu.au/" style="line-height: 1.3em;">Grattan Institute</a>.
Grattan Institute began with a $15 million endowment from each of the federal and Victorian governments. In order to safeguard its independence, Grattan Institute’s board controls this endowment. The funds are invested and Grattan uses the income to pursue its activities.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>.
</body></html>

Changes help the budget but not the economy

<html><body>
GUEST OBSERVATION
Prime Minister Tony Abbott has hailed the <a href="https://www.theguardian.com/world/2014/apr/07/tony-abbott-free-trade-deal-shared-values-japan-australia" target="_blank" style="line-height: 1.3em;">“shared values”</a> that enabled Australia’s free trade deal with Japan and now heads to China for crucial trade talks.
But the Australian mainstream sees itself as fundamentally separate from our Asian neighbours across most economic and cultural dimensions.
This mindset is challenging enough in trade and person-to-person ties. Transport infrastructure and city planning just don’t feature sensibly in discussion between Australia and its developed Asian neighbours.
Abbott has invited the Koreans to invest in yet more roads, but we have continuously spurned a long-held Japanese interest in Australian high speed rail opportunities.
Two problematic and emblematic cultural preconceptions hold Australia back from fully engaging with our region in the field of urban planning and infrastructure.
The first is the idea that Asia is “too different” to be relevant to our experience. The second is the even more problematic idea that we have nothing to learn from Asia (while they should presumably listen intently to us).
This intellectual blockage is possibly caused by an Australian infrastructure inferiority complex arising from decades of lost opportunities - rather than some weakness of planning policy or cities in developed Asia.
It also originates from insufficient distinction between developing Asia and developed Asia (incorporating Japan, Korea, Hong Kong, Taiwan and Singapore).
Let’s be real here - Australian cities are planned appallingly and have some of the most unsustainable living patterns and transport outcomes of all the world’s developed cities.
<img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/45890/width668/29fkmghq-1396996230.jpg" alt="">
Photo: Nagoya, which has similar population to Sydney or Melbourne, has an efficient metro system and an emphasis on rail travel. Chris Hale, March 2014
Places like Melbourne have done okay recently with downtown urban design and renewal. But at a broader scale, we have failed to develop mass transit systems capable of meeting commuter demands.
This hurts our cities and it hurts our trade opportunities in the infrastructure, planning and city design sphere.
Sydney has recently decided on a light rail corridor where a metro was needed. Melbourne struggles to launch any coherent response to rampant ridership growth on trams and trains.
Brisbane remains in cloud cuckoo land with its bus obsession - when only strategic rail-based interventions can shape its future growth.
Australian cities have spent the past 30 years riding the complacency of a car culture based on local vehicle manufacturing.
Major road projects formed the core of cynical pork barrel politics, draining the vast bulk of our infrastructure dollar.
Australians need to take a serious look at what major Asian cities - such as Tokyo - have achieved in infrastructure and urban policy over recent decades.
Tokyo coped with a massive influx of internal Japanese economic migrants during the second half of the 20th century. It did so through radical investment in metro rail, combined with judicious attention to zoning, parklands and community assets, which has led to the dominance of rail as majority mode of travel.
Other cities such as Singapore and Hong Kong have heavily oriented city planning to rail, with new metro stations opening yearly to bring distinct benefits of convenience and livability.
Japan’s high speed rail has also played a core role in that country’s economic and scientific development. Recently the Chinese have invested in a great and growing system of fast inter-city connections.
By contrast, successive Australian governments at all levels have turned their backs on transit as a tool for policy, economic development, and urban structure.
Infrastructure Australia was clearly due for an overhaul, but as a country we can’t afford a replacement that exists only to rubber stamp destructive road pork.
Tony Abbott has said he wants to be the ‘infrastructure prime-minister’ but his reported obsession with the virtues of the private vehicle over public transport can only be understood as an outdated and defeatist ideology.
This thought process has no place in influencing contemporary infrastructure policy.
We should look carefully at the emphasis Asia has placed on high-speed inter-city rail. These systems are now the backbone of advanced economies around the world, while only Americans and Australians remain unconvinced.
By censoring our discussion, we miss out on a fuller appreciation of 21st century infrastructure thinking and urbanism. Some great planning ideas and examples are available right on our doorstep.
Perhaps its time for a little less lecturing, and a little more learning.
Chris Hale is lecturer, Department of Infrastructure Engineering at University of Melbourne.
Chris Hale receives funding from the Carlton Connect Initiative of the University of Melbourne. This also includes funding from: City of Moreland, City of Darebin, and City of Yarra, Grimshaw architects, and MGS architects. Over many years, Chris has been the recipient of meaningful in-kind support from the MTR Corporation of Hong Kong - in the form of data availability, strategic briefings, and access to senior staff time.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>.
Photo courtesy of Flickr/<a href="https://creativecommons.org/licenses/by/2.0/" target="_blank">Creative Commons</a>.
</body></html>

Time for Australia to consider Asian lessons on city infrastructure

<html><body>
GUEST OBSERVATION
The Commission of Audit has recommended including homes above a certain value in the means test that determines who gets the age pension and how much. Under the proposal, homes valued in excess of A$500,000 would be assessable for singles, while for couples the trigger would be A$750,000.
The family home is currently exempt from the assets test but the commission argues this is inequitable because it means high levels of wealth are sheltered. It suggests a more comprehensive means testing regime be put in place by 2027-28.
If this proposal is picked up by the federal government, it would see a sizable group of retirees required to call on the equity in their homes to help fund their retirement.
It would be a brave government that “forced” pensioners to sell their homes to release that equity, which makes reverse mortgages a likely tool for retirees who need to convert their home into cash flow.
Even now, a reverse mortgage can be an alternative to “downsizing” into a smaller and cheaper home to release funds for retirement.
How reverse mortgages work
A reverse mortgage allows homeowners to access a loan, or a regular stream of cash (an annuity), using their home as collateral. Borrowers continue to live in the property until death – or they move into aged care – after which the loan is repaid from the sale of the house.
The mortgage can apply to the full value of a property, or borrowers may be able to access “residual value protection”, allowing them to set aside a portion of the house’s value to be available for aged care or as an inheritance.
Interest rates are generally higher than for standard home loan products due to less competition in this sector and higher risks for the lender.
For some years now, on the back of the lessons learnt from the global financial crisis, there have been government-imposed rules around “negative equity” that prevent lenders from extracting repayments beyond the value of the house. This means lenders can suffer a loss if the loan amount exceeds the value of the house at the date of the sale, something that may happen in a softening property market.
Reverse mortgages involve compounding interest, where interest charges are added onto the loan as they accrue. This means the loan amount can rise quickly.
Taking out a reverse mortgage can affect the availability of funds for major items such as aged care and bequests, and it can have an impact on other family members who may live in the house. Ultimately reverse mortgages demand a much higher degree of financial literacy from individuals, who may need professional advice on issues such as tax and Centrelink implications.
Could we end up like the US?
Despite the fact that reverse mortgages helped send mortgage insurer the Federal Housing Administration bankrupt in the US, the market there is <a href="https://www.reuters.com/article/2014/03/17/us-banking-reversemortgages-idUSBREA2G05T20140317">returning</a>.
How would increased demand for reverse mortgages change the Australian financial system?
The bulge of baby boomers entering retirement, along with a change to means testing along the lines proposed, could be expected to lead to an increase demand in such products. In theory, new lenders would be attracted into the market, thus increasing competition and driving interest rates down (in relative terms, against the risk-free rate).
Three main sources of risk are apparent, the first of which is declining real estate values, or the risk of negative equity. The loan amount may end up being larger than expected if the borrower enjoys a long life or property values fall.
Second, with a reverse mortgage the lender generally has no recourse to assets other than the home. Third, at this stage of life borrowers may neglect maintenance and property improvements, eroding the value of the home.
Many of these risks, in particular real estate values and an ageing population, are systematic and may become systemic. Should reverse mortgages enjoy significant growth, as projected, Australian lenders would have increased exposure to house price risk. If house prices dropped, more defaults would occur.
The impact of growth in reverse mortgages on the housing market itself may be limited, as properties are sold only after death or upon a move into aged care. But there may be a decrease in downsizing activity if these products become more popular.
An alternative to bank lending
Currently, reverse mortgages are mainly provided by the banking sector, which is already over-exposed to mortgages. At the same time, the superannuation sector is looking for long-term investment opportunities. Why not create financial products where super funds provide cash flow for retirees in exchange for access to the value in their homes?
Some super fund members may not want further exposure to Australian real estate, particularly if they are already house owners, but this could be an additional option in the current portfolio of investment choices offered by funds to their members.
The outcome might be comparable to the situation in overseas pension systems – such as Germany’s – where pensions are organised to a large degree as intergenerational wealth transfers, where one generation pays for the next generation.
Such a system could increase the resilience and efficiency of the Australian financial system.
Harry Scheule is associate professor, finance, UTS Business School at University of Technology, Sydney.<img src="https://counter.theconversation.edu.au/content/26433/count.gif" alt="The Conversation" width="1" height="1" style="line-height: 1.3em;">
Harry Scheule does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>. 
</body></html>

Reverse mortgages need a rethink if they’re the new age pension

<html><body>
GUEST OBSERVATION
Australia has had unprecedented growth in GDP since December 1991 and avoided the both the 1998 Asian financial crisis and the global financial crisis in 2008, without a recession. Compared to most of the OECD countries who have suffered increases in unemployment and long term unemployment since then, Australia has powered ahead.
It is true that as the global financial crisis hit and tax revenues fell, Australia introduced a series of stimulus measures to tackle the crisis that moved the economy from a budget surplus to budget deficits. For what they are worth, the rating agencies have given Australia a triple A rating, which means that they are not concerned about our budget deficits or debt.
How we are doing now
As the commodity boom has come to an end, the Australian economy has slowed down but has not gone into a recession. It is certainly not in crisis. In my recent paper, <a href="https://ftp.iza.org/dp7505.pdf">Australia: the miracle economy</a>, I studied the behaviour of the Australian economy compared to some of the OECD countries: according to the OECD our economy has had a stellar performance.
On important macroeconomic indicators, including GDP, unemployment, inflation, Current Account Balances, and debt, Australia compares very favourably. Our GDP has been growing consistently, and our unemployment rate has been consistently lower than most OECD economies since the GFC.
Australia has the lowest debt (measured by Gross Financial Liabilities) in the OECD. In 2013, Australia’s Debt to GDP ratio was 34.4 %, Germany was 80.9 %, the UK at 111.6 %, USA at 106.5 % and the OECD average was 112.0 %. Debt crisis? What debt crisis?
<img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/47952/width668/wygjz2nc-1399447632.jpg" alt="">
Government Debt to GDP Ratio
Even Germany took until the end of 2012 to catch up with Australia. Some of the OECD countries have been concerned about deflation, but Australia has managed to go through the crisis with negligible inflation. We have had current account deficits (CAD) for more than a hundred years, except for very brief spells of a surplus. However, since the GFC, only Germany and Italy have had lower CADs.
However, the Coalition government has been arguing that the economy is in dire straits and is going to collapse because of a large budget deficits and a ballooning government debt. It is threatening to cut back on welfare, health, education, and the public service. These mirror austerity measures that have failed to return many OECD countries back to growth. But the same time it wants to abolish the mining tax and the carbon tax: one set of policies to hit the poor and another to help the rich.
Given the announcement of cuts back on government expenditures at a time the economy is slowing, recent proposals to introduce an income tax - or deficit levy - would lead to an even greater fall in aggregate demand and increased unemployment.
How we got here
Thanks to several mining booms and strong demand from Australia’s largest trading partner, China, the Australian economy has had continuous growth since December 1991, with GDP growing even through the GFC. The OECD has <a href="https://www.oecd.org/eco/surveys/australia2012.htm" target="_blank">repeatedly stressed</a> the stellar performance of the Australian economy, saying that with “its 21 years of uninterrupted growth, Australia stands out among OECD countries.”
In comparison, most of the other OECD economies faced falls in GDP that continued for several years.
<img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/47954/width668/jw4ypw6x-1399447752.jpg" alt="">
Australia leads in the GDP Race.
In the United States, GDP levels did not reach the pre-recession period until 2011; similarly, Germany - the wunderkind economy - did not reach the pre-recession levels until the same year.
While is hotly debated, many economists are convinced (including Nobel Laureate Joe Stiglitz) that the timely introduction of a stimulus package was instrumental in avoiding a recession. At the same time countries like Greece and Portugal, Spain, Italy that introduced major austerity measures are still wallowing in a deep recession.
What’s next?
While our manufacturing sector has underperformed due to strength of the Australian dollar, the OECD points to a favourable future for our economy:
"Non-mining tradable sectors have struggled with the strong exchange rate driven by the mining boom. However, fundamentals remain solid with the unemployment rate close to its structural rate and inflation and public debt low. Growth strengthened in 2012, and the outlook is positive, even though there are mainly negative risks stemming from the external environment, to which Australia is however less vulnerable than many other OECD countries."
In its most recent report on Australia, the OECD forecasts a general pick-up in demand to off-set declining investment in the resources sector, although it warned “rapid growth in house prices and mortgage lending requires continued close attention”.
The IMF downgraded its economic forecasts for Australia late last month in a move <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2014-04-28/imf-downgrades-economic-growth-forecasts-for/5416704" target="_blank">interpreted</a> as an implied message not to bring down too harsh a budget.
It is certainly true that the Australian population is ageing and that older people require more spending on health. Over the future years, we would certainly see increasing expenditure on health, partly due to ageing but also due to the improvements in medical knowledge.
The National Disability Insurance Scheme (NDIS) will certainly make increasing demands on the budget. But as long as we as a society believe it is a good thing, we need to find finances to pay for it. To increase government revenues, we should consider an inheritance tax, remove negative gearing, close down overseas detention centres, introduce a progressive Medicare levy and remove the concessions on capital gains taxes, to name a few.
As long as our interest on debt does not grow faster than our growth rate of GDP, the economy will not collapse.
The Financial industry’s gurus, the ratings agencies, have continued to give Australia triple A ratings, <a href="https://www.smh.com.au/business/the-economy/australias-triplea-safe-amid-strong-finances-moodys-20121114-29blj" target="_blank">just as Moody’s in its recent report</a>. It is clear that the finance industry, the OECD, and the IMF are not worried about the health of the Australian economy or its budget deficits or debt. Why, in that case, do the politicians both on the right and the left mouth these words of “budget responsibility” and “budget surpluses”?
Raja Junankar is honorary professor at the Industrial Relations Research Centre at Australian School of Business, emeritus professor, University of Western Sydney and Research Fellow of the Institut zur Zukunft der Arbeit (IZA) in Bonn, Germany. He has received funding from the OECD.
This article was originally published on The Conversation. 
</body></html>

The state of the Australian economy

<html><body>
GUEST OBSERVATION
The Victorian government has decided to reduce payroll tax by 0.05%, from 4.9% to 4.85%. The decision comes as the Commonwealth government contemplates an increase in income tax via a deficit levy.
But if the objective is to increase national productivity to meet growing expectations for government services, as well as private consumption, logic would shift the tax burden away from income tax and increase payroll tax. This approach might even provide the basis for more effective and transparent commonwealth-state financial arrangements.
Stand-alone taxes are not the answer
A comprehensive income tax system would include tax on wages, but also on capital income, where capital income is the return on accumulated savings, such as superannuation earnings.
Commonwealth taxation is reasonably comprehensive for wages, with fringe benefits concessions and tax breaks for superannuation for those on middle and high incomes.
In the case of capital income, there are many concessions, including the exemption of income earned on savings invested in owner-occupied homes, the half rate on capital gains and the low flat rate on superannuation fund earnings; interest and dividends face no concessions. A progressive rate schedule is applied to taxable income.
By contrast, a comprehensive payroll tax would fall on all labour remuneration, but not on capital income.
In Australia, the states impose payroll tax on a base that covers about half of all salaries. The largest concession is the exemption of small businesses, with the definition of small business varying across the states (and territories). There are exemptions also for other governments and charities. Above the threshold, a flat marginal tax rate is applied, again with different rates in different states.
Measuring the real impacts of tax
The ultimate outcome of income tax, and especially of payroll tax, is often misunderstood. It is generally accepted that most of the effect, if not all, of the income tax is borne by households as lower disposable income to buy things; with the tax revenue used to fund government goods and services. But in reality, most of the income tax on labour income is first paid by employers as a PAYG deduction from salaries.
And the economic impact of payroll tax should also be on households as lower take-home pay. Initially, businesses pay the payroll tax bill to government, and with a jump in labour costs some are forced to reduce the number of people they employ, boosting unemployment.
The increase in unemployment induces a slower rate of increase in market wages in order for the labour market to return to a new near full employment equilibrium. That is, in the longer run, households bear payroll tax as a lower market wage and take-home pay.
Further, consider the current payroll tax with its exemption on the half of employees working in small businesses. While large businesses write the payroll tax cheque, ultimately the tax is passed on as lower market wages and take-home pay for employees of both small businesses and large businesses.
At the same time, the selective payroll tax on large businesses distorts the employment mix away from large to small businesses with a loss of national productivity.
Replacing the current payroll tax, with its small business exemption, with a comprehensive base and lower flat rate payroll tax would also result in lower market wages for all employees. But, the distortions of the current system to the mix of big and small businesses would be removed, resulting in a net increase in national productivity.
The case for a shift from income tax to payroll tax
Shifting the tax burden away from income tax and onto a comprehensive payroll or consumption tax would reduce the effective tax burden on capital income, leading to an increase in aggregate investment and a more productive mix of different investment and saving options with a final economic impact on higher real wages and household income.
Since the arrival of Governor Phillip, Australia has been a net importer of foreign capital to meet its investment needs. Foreign investors, with options to place their savings in many other countries, require at least an alternative world return on the Australian investment after Australian tax.
A lower Australian tax on capital income, for example a lower income or corporate tax rate, means some marginal Australian investments with a lower pre-tax return become worthwhile. In time, the increased investment means a larger stock of capital and technology per Australian worker, feeding into higher labour productivity and market wages.
Finally, a broader base payroll tax, and possibly also a higher payroll tax rate, along with a reformed land tax, offers a desirable tax reform package to increase the tax revenue of the states.
John Freebairn is a professor at the Department of Economics at University of Melbourne.
This article was originally published on <a href="https://theconversation.com">The Conversation</a>.
</body></html>

Australia’s tax system is half-baked and a deficit levy won’t help

<html><body>
GUEST OBSERVATION
Buyers will naturally see the front of your home first.
Impressions are quickly formed and many potential buyers will make up their mind before even setting foot inside your house.
Look at your property from the footpath or across the street. Ask yourself whether your home seems inviting. Be honest and consider:
<ul>
<li>Are there any problems that can be easily and cheaply fixed? </li>
<li>Is there any chipped paint? </li>
<li>Would planting flowers or shrubs improve the garden? </li>
<li>Is the garden tidy? Do I need to mow the law, clear the doorstep or weed the garden?</li>
</ul>
Let go and think like a buyer
Selling a home is an emotional process, particularly for people who have been forced to sell. However, it is still possible for you to let go of your home emotionally. Imagine handing over the keys to the new owner. Allow potential buyers to picture themselves living in the house by:
<ul>
<li>Removing your personal photographs </li>
<li>Allowing them to park in your driveway</li>
</ul>
Clear the clutter 
You’re not just selling your home – you’re selling the image of a comfortable lifestyle so you want your house to look as clean and clear as possible.
Often we get so used to our own clutter that we can’t even recognise that it needs to be moved. Ask a friend or family member who does not live at the house to help identify unnecessary clutter.
Be sure to:
<ul>
<li>Clear benches </li>
<li>Remove excess books from bookcases. </li>
<li>Place everyday items in a box so when the potential buyers visit, you can quickly put the box in a cupboard. </li>
<li>Ensure the entrance and walkways are clear </li>
<li>Throw out broken and damaged items </li>
<li>Dispose of unnecessary paperwork </li>
<li>Store bulky furniture and sporting equipment offsite</li>
</ul>
Make your home look new
Make minor repairs and clean your house. You’ll be surprised how much these improvements will lift your home.
<ul>
<li>Patch any holes in the walls </li>
<li>Replace cracked flooring and old light bulbs. </li>
<li>Shine the floors </li>
<li>Replace your bathroom towels and soap </li>
<li>Wash your windows and doors</li>
</ul>
Clean your cupboards
Rearrange the inside of your cupboards. Buyers are often interested to know how you use the cupboard space and will look inside.
If everything is tidy, they will trust that you look after the house.
You also want to communicate that the house has enough storage space that they can live comfortably – so make sure that your cupboards are not filled to the brim.
Renovate wisely                                                                                                                           
Home improvements can be very expensive. Focus on value-for-money improvements which will generate a higher selling price. While major renovations may make your home more saleable, you may not recover the costs when you sell. Remember you want to maximise your profit!
Cosmetic improvements such as touching up paintwork or planting flowers in your front yard are usually good value for money. When choosing paint colours, try to be objective. You may love your bright orange kitchen but there’s a fair chance that most buyers won’t. Consider painting your walls in neutral colours in a matt finish.
Impress the senses
For many, buying a home is an emotional choice. For that reason, a home that feels comfortable is likely to sell for more. Consider:
<ul>
<li>Putting out vases of fresh flowers 
</li>
<li>Heating the house in winter 
</li>
<li>Leaving several windows open in the summer 
</li>
<li>Ensuring that your house has a pleasant aroma 
</li>
<li>Leaving lights on in dark areas 
</li>
<li>Opening curtains and blinds 
</li>
<li>However much you love your dog, potential owners may not. Keep pets outside or away from your home during inspections.
</li>
</ul>
When you feel that your property is ready, walk around your home and ask yourself if it feels welcoming. Does your house look like nobody lives there? If so, you’re ready!
James Paynter is director of <a href="https://www.hodges.com.au/hodgesbentleigh" target="_blank">Hodges Real Estate in Bentleigh</a>.
</body></html>

Standing out in your street – preparing your home for sale

<html><body>
With the federal budget looming, retail sales have slowed down, up just 0.1% for March, driven mainly by household goods and food.
Figures published yesterday by the Australian Bureau of Statistics show <a href="https://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/8501.0Main%20Features1Mar%202014?opendocument&amp;tabname=Summary&amp;prodno=8501.0&amp;issue=Mar%202014&amp;num=&amp;view=">overall sales</a> are down by 0.2% from February, despite a 1% growth for household goods, a 0.5% growth for food, and a 1% growth for cafes, restaurants, and takeaways.
Department stores are down by 0.6% and clothing, footwear and personal accessory spending is down by 0.2%.
However, ANZ senior economist Felicity Emmett told SmartCompany while shrinking consumer confidence is a response to General Motors quitting Australia by 2017 and the uncertain future of Qantas, she expects to see spending rise further.
“I think the outlook is quite good for consumer spending. House prices are rising at a solid rate and that will help to support consumer spending going forward,” says Emmett.
National Retail Association chief executive Trevor Evans says while the <a href="https://www.smartcompany.com.au/legal/politics/41743-budget-2014-national-commission-of-audit-sharpens-axe-as-government-moves-to-ditch-tax-returns-for-1-4-million-australians">federal budget may help consumer confidence if the government is seen as reining in debt</a>, an overly harsh response risks destroying growth.
“We think it’ll be good for consumer confidence, economic growth and retail status if the government can be seen to be getting the budget problem under control,” Evans says.
“We’re worried if the budget response is too harsh, it might have the impact of shocking households and destroying the momentum,” he says.
But Evans sees the Australian expansion of Swedish furniture and home wares chain IKEA and US home wares giant Williams-Sonoma as an international vote of confidence in the retail sector.
IKEA plans to open four more stores by 2016 and launch an online store across 44 countries over the next two years. IKEA Australia currently has no online store.
Pottery Barn partner company Williams-Somona plans to launch eight more Australian stores over the next year.
“The Australian economy is clearly doing better and preforming better and there are many countries in the developed world with a waiting brief on Australia and [who] would be willing to take charge to enter the market here is conditions are right,” says Evans.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
</body></html>

ABS figures show slowdown in retail growth ahead of the budget

<html><body>
An app that lets users invest like billionaires has hit the Australian market.
The iBillionaire app tracks the stocks of some of the world’s most successful investment players and lets users adjust their own stocks accordingly.
The investment <a href="https://www.smartcompany.com.au/finance/investment/41783-five-gems-from-warren-buffett-s-annual-shareholders-meeting">wisdom of billionaires such as Warren Buffett</a> and Carl Icahn has always been publicly available, but iBillionaire aims to put their stock picks conveniently in your pocket.
Released a year ago, the app has already had more than 100,000 downloads, with 5,000 keen Australia users jumping on board.
The app’s founder and chief executive, Raul Moreno, told SmartCompany investors were already making money from its use.
“If you look at the reviews on the app store, you can see people are making money, they are very happy with it,” says Moreno.
Moreno says the app’s usefulness can be quantified by the iBillionaire index, which showed a wealth increase for users.
“People following the app have seen an 8% increase in their assets from November,” he says.
Moreno says iBillionaire will soon add several top Australian money men to the app for its Australian users, including investment manager Kerr Neilson and British-Australian businessman Michael Hintze.
He says Australian users would benefit from keeping an eye on the rapidly moving local retail sector.
Ecuadorian-born Moreno had the idea for the app while he was working in the finance industry, after his own Apple stocks fluctuated greatly while he was on vacation.
“Not having that information at the time was very painful,” he says.
“I think it’s critical to have access to this sort of information all the time.  And knowing what billionaires know, because they have more insight, is very useful.”
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
</body></html>

Invest like Warren Buffett does with new iBillionaire app

<html><body>
GUEST OBSERVATION
Abolishing the sacred cow of negative gearing - where losses can be used as a deduction against other income - is considered by governments of all persuasions as electorally unpalatable.
But this part of the income tax system is one of the few areas left which confers this highly favourable treatment. In many other important areas of our public finance and income tax system, negative gearing is effectively abolished in favour of quarantining of losses.
Negative gearing is allowed on passive rental property and share investments and for “large” businesses. Both the pros and cons of negative gearing are well-known. Its most immediate advantage is allowing taxpayers to use a loss on one investment as a deduction against a profitable investment, or other source of income. But it is accepted that it undermines the progressive nature of the income tax, does little to increase housing supply stock and is a significant cost to government revenue.
In contrast to negative gearing, quarantining is where the loss on an investment cannot be used in the year it is made, but can be used in future years, against profits from the same investment from which the loss arose. Usually, but not always, if the investment is sold while there are quarantined losses, these can be used to reduce the taxable profit on exiting the investment.
In our tax system, quarantining is used when determining whether a taxpayer is liable to pay the Medicare levy surcharge; for loan repayments under the higher education loan program (HELP); and assessment of income under the child support regime, particularly Family Tax Benefit Part A and B.
Quarantining also applies when the tax office is assessing means-tested concessions such as the dependent (invalid and carer) tax offset, or senior and pensioner tax offsets.
Small businesses that make a tax loss in a non-corporate form are not permitted to use that loss against other profits (so-called non-commercial loss rules). While these measures are in part a response to the ridiculous hobby tax loss claims of the past, these rules apply quarantining to genuine small businesses, including those in the start-up phase. Quarantining also applies to certain boating activities.
In the social security system, quarantining applies where a particular benefit is means tested, such as Seniors Health Care Card, or the parental income test for dependant youth allowance. Like the income tax though, quarantining is not universally applied under this legislation (for example, it does not apply to the income test for aged pensioners). Also, the current paid parental leave scheme also uses quarantining in its relevant income measurement.
So one can see that quarantining applies in numerous areas of our public finance system. The starting point for debate should focus on economic capacity. By allowing negative gearing, the loss is being treated as a genuine signification of reduced economic capacity to either contribute income tax (or other contribution), or to receive welfare assistance. On the other hand, if quarantining applies, the loss is not regarded as signification of reduced economic capacity to either contribute tax or to receive welfare assistance.
Unfortunately, there are credible arguments both ways. And the fact that countries around the world do not take a uniform approach to the issue under their respective income tax systems supports this.
However, our public finance framework ought to be internally consistent so that similar things are treated in a similar manner, unless there is a sound explanation for differential treatment. This should be the case within the social security and income tax system, as well as across both, as the social security system is the mirror of the income tax system, or a negative income tax.
Both systems have economic capacity at their foundation. Those with sufficient economic capacity make an income tax contribution, and those who lack it receive payments (and other non-money benefits) for economic support. Given the shared foundation of the income tax and social security systems, or that they are really one system, it is hard to see why a different measure of economic capacity should be used within each system or across systems.
Another lesser dimension is that tolerating negative gearing in parts of the income tax and social security systems, but not tolerating it in others parts of those systems, adds complexity. Differential treatment of the same thing necessarily adds to administration and compliance costs.
In the end, there is a real argument that negative gearing should either be restored in the areas where it is currently prohibited, or should be scrapped across the board.
Given where the debate is now, I doubt anyone will seriously argue the former. That tends to leave movement towards the latter, because no one would seriously argue that the current differential treatment is a principled position with credibility.
Dale Boccabella is associate professor of taxation law at <a href="https://www.asb.unsw.edu.au/Pages/default.aspx" target="_blank" style="line-height: 1.3em;">Australian School of Business</a>.<img src="https://counter.theconversation.edu.au/content/24265/count.gif" alt="The Conversation" width="1" height="1" style="line-height: 1.3em;">
Dale does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>.
</body></html>

Why it’s time to quarantine negative gearing

<a href="https://www.apartments.com.au/developments/broadbeach-qld-4218">Broadbeach</a> offers plenty of reasons to live vertically, but moving from a substantial family home into an apartment can expose the compromises of high-density living. Privacy, room for guests and usable living space tend to matter more when an apartment is intended as a permanent home rather than an occasional coastal base.

A typical residential floor at <a href="https://www.apartments.com.au/new-apartments/the-eveleigh-broadbeach-7-9-surf-parade-broadbeach-qld-4218">The Eveleigh</a>, on Surf Parade,&nbsp;contains just four apartments. The 94-residence development by <a href="https://www.apartments.com.au/developers/hirsch-faigen">Hirsch &amp; Faigen</a> is predominantly made up of expansive three-bedroom homes, with a limited collection of half-floor penthouses above.

Across the apartment floors, <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> has used the relatively limited number of residences to give each home greater access to natural light and outlook. Living spaces extend towards full-height glazing, while a series of bay windows frame selected views across the Pacific Ocean, city and hinterland rather than treating the building edge as a continuous wall of glass.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360965]

“The apartment floors deliver a collection of homes that embrace controlled outlook via a series of bay windows deliberately framing moments of view,” Rothelowman Director Kim Lowman said.

From outside, those projecting forms contribute to the tower’s faceted profile. Strong horizontal and vertical elements establish its proportions, while the changing position of the sun alters the light, shadow and reflection across the façade throughout the day.

The same attention moves inside the apartments, where the material palette combines warm timber, natural stone, metallic detailing and softer curved forms. Kitchens sit within the main living zone, with stone island benches, integrated joinery and European appliances, before the living areas extend towards the glazing and the outlook.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360981]

Three genuine bedrooms provide room to accommodate family and guests, while two secure car spaces and storage address some of the practical considerations that can become more noticeable when moving from a larger home. Feedback from the display suite has centred on the warmth and restraint of the interiors, with buyers commenting that the residences feel like homes rather than conventional coastal apartments.

A limited collection of half-floor penthouses occupies the upper levels, increasing the scale of the living spaces and adding private balconies and elevated finishes. From this position, the outlook extends between the ocean and hinterland.

Outside the private residences, The Eveleigh separates its shared spaces between the podium and rooftop. The podium is centred on wellness, with subtropical landscaping surrounding a swimming pool and pool terrace, yoga garden, private gymnasium, sauna and hot and cold plunge facilities. Landscaped retreats and pavilions provide additional places to sit away from the main recreation areas.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360966]

Higher in the building, a rooftop pavilion and private dining suite sit alongside resident lounge, barbecue and outdoor dining areas, opening towards panoramic views across the ocean, city and hinterland.

“Buyers are no longer just looking for an apartment, but a lifestyle where they can relax, reset, and enjoy a balanced way of living,” Hirsch &amp; Faigen Director of Sales Matt George said.

Interest to date has come from established owner-occupiers and interstate lifestyle purchasers, including buyers planning a future move to the Gold Coast. Many are coming from larger homes and want to reduce ongoing maintenance without giving up space for family and guests, privacy, two car spaces or the ability to entertain at home.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360969]

Much of that daily life can also take place beyond the building without requiring a drive. Kurrawa Beach and Pratten Park are an easy walk from Surf Parade, while Pacific Fair, Oracle Boulevard, The Oasis, restaurants, cafés, entertainment and public transport are also within walking distance.

The Eveleigh is Hirsch &amp; Faigen's fourth Gold Coast development since entering the market in 2021, following The Hemingway at Palm Beach, The Emerson at Kirra and Yves at Mermaid Beach. Each of the preceding projects sold out before completion.

“Broadbeach had been on our radar throughout our time operating on the Gold Coast,” the developer said. “Following our projects in Palm Beach, Kirra and Mermaid Beach, Broadbeach represented the natural next step for the business.”

The Surf Parade site brought together proximity to the beach, protected coastal outlooks and walkability to dining, shopping and recreation. Hirsch &amp; Faigen also identified the street as an emerging premium residential address, with enough separation from Broadbeach's busier destinations to retain a quieter environment at home.

The Eveleigh is now under construction by Maxcon, with completion forecast for mid-2028. Three-bedroom residences are currently available from $2.87 million.

[smartcode_project_cta:default project_id=149670]

Joel Robinson

The Eveleigh brings house-like apartments to Broadbeach

A long-stalled Campbelltown development site is back in play, with new plans for 139 apartments set to supersede a mixed-use scheme approved almost a decade ago but never built.

The new proposal for 28 Cordeaux Street would deliver 116 market and 23 affordable apartments in a part 14-storey building, bringing a substantial new project into a Campbelltown market where new apartment supply remains limited.

Plans have been filed over the 3,092 sqm corner site at Moore-Oxley Street, around 600 metres from Campbelltown Railway Station and the city-centre retail core.

The site already carries a mixed-use residential approval dating to 2016. Doroch Architects has now been engaged on a larger replacement scheme, which is progressing as a State Significant Development Application following a Housing Delivery Authority determination in August 2025.

The apartment mix comprises 39 one-bedroom, 72 two-bedroom and 28 three-bedroom residences. Two-bedroom apartments make up just over half of the project, while three-bedroom homes account for 20 per cent.

<img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="136dd5b9-3791-4da6-9e31-76f533f5b4de" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da2.png?VersionId=LgOSy9nwf5u.MGswBBwaGGxuX8QpHSl_" />

Of the 139 apartments, 23 will be delivered as affordable housing under the in-fill affordable housing provisions of the Housing SEPP. The affordable component represents 15 per cent of the residential gross floor area and will be managed by a registered Community Housing Provider.

Doroch has sought to break the scale of the building into two distinct elements, with a masonry podium of around four storeys establishing the street edge before the residential tower steps back above.

The corner position has shaped that approach. Cordeaux Street faces toward the commercial and civic centre, while Moore-Oxley Street leads into the lower-scale residential neighbourhood to the south, and the design verification report describes the site as "bridging the commercial core to the north and established residential areas to the south."

The podium will be expressed predominantly in face brick, while the upper levels shift to brushed and grooved concrete cladding with darker metal detailing. Recessed sections, deep balcony edges and landscaping break down the upper form, with an approximately 11.8-metre setback to the northern boundary addressing the adjoining St Peters Anglican School.

<img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="c8b3d2d3-c561-4bfc-a5d9-a68c0c10dac1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da1.png?VersionId=AeAEyJU02Gk2k5noUj2StziCvdQ7fW4B" />

Campbelltown has been starved of new residential developments in the last decade.

The only other notable development set to come to market this year is ALAND's Queen Square, a mixed-use precinct on over two hectares that will comprise apartments above a vibrant ground-level retail and hospitality dining precinct.

First look: New 139-apartment plans revive long-stalled Campbelltown city centre site

First Look: Sherlock Construction pitches apartments for low-rise Deception Bay

Queensland builder-developer MAYD has revealed the first look at its major North Kirra beachfront development, lodging amended plans that reduce the number of apartments and increase the proportion of larger residences.

The project is planned across a substantial 4,742 sqm amalgamated site spanning seven lots at <a href="https://www.apartments.com.au/new-apartments/2-6-pacific-parade-bilinga-qld-4225">2-6 Pacific Parade</a> and 27-33 Golden Four Drive in Bilin​ga, directly opposite Nor​th Kirra Beach.

<a href="https://www.apartments.com.au/developers/mayd-group">MAYD</a> secured the site for $32.5 million in 2025, in what was one of the Gold Coast's largest property transactions of the year.

The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.

The latest amendments seek to reduce the overall apartment count and shift the project further toward the owner-occupier market, with larger residences designed for buyers wanting considerably more space than traditionally offered in a beachfront apartment.

The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.

MAYD has appointed Cera Stribley to lead the architecture and interiors, with the Melbourne-based design practice drawing on the beachfront setting through a series of ocean-facing terraces and heavily landscaped balconies.

Strong horizontal forms and curved balconies will define the exterior, with subtropical landscaping integrated throughout the building to soften the built form and increase the connection between the residences and the beachfront.

The project will also include an extensive collection of resident wellness and lifestyle facilities, continuing the broader shift across the Gold Coast's luxury apartment market toward larger homes supported by resort-style amenity.

<img alt="MAYD" data-entity-type="file" data-entity-uuid="d1bcbb05-e659-4b47-8bd4-1e595315e2ad" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%202.05.03%E2%80%AFPM.png?VersionId=jj0XEud1X1DuLt7_KyElhjMdZGOXmLHP" />

MAYD Founder Todd Mould said North Kirra was increasingly appealing to buyers attracted to the more established, lower-density character of the southern Gold Coast.

"North Kirra presents one of the most compelling luxury residential opportunities currently emerging in Australia, combining absolute beachfront with the character and authenticity that buyers are increasingly seeking, and the same sense of tight-knit community that defined Burleigh and Currumbin perhaps 10 or 15 years ago," Mould said.

"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."

The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.

Kirra in particular has emerged as one of the region's more tightly held beachfront markets, with its relatively low-density character, established surf and hospitality scene and proximity to Gold Coast Airport differentiating it from the higher-density markets further north.

Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.

"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.

"Inspired by the coastline itself, the architecture has been shaped around space, privacy and resort-style living, creating a collection of homes that reflects the next generation of luxury on the southern Gold Coast."

MOTIV Managing Director Carly Cottam, who has been appointed to market the project, said buyer attention had continued to move south along the Gold Coast.

"Purchasers who may once have defaulted to Broadbeach, Main Beach or Surfers Paradise are increasingly recognising the value of a genuine beachfront location that offers lower density, strong amenity and a more established sense of community," Cottam said.

"Kirra has a powerful combination of growing demand and genuine scarcity. Beachfront supply is inherently constrained, the area remains relatively low density, and buyers are increasingly placing a premium on locations that feel established, uncrowded and authentic rather than heavily developed."

Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.

"Being minutes from Gold Coast Airport makes it particularly compelling for interstate buyers, frequent travellers and second-home purchasers who can access an authentic coastal lifestyle almost immediately after stepping off a flight."

The acquisition takes MAYD's active development portfolio to more than $500 million, with the North Kirra project representing one of its largest undertakings to date.

MAYD is targeting an early 2027 launch.

First look at MAYD's North Kirra mixed-use precinct

<main data-perf-region="main">
Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.

But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.

Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.

[smartcode_project:default project_id=152737 project_image_fid=377679]

The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.

It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.

[smartcode_project:default project_id=152737 project_image_fid=377675]

Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.

Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.

Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.

[smartcode_project:default project_id=152737 project_image_fid=377685]

Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.

"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.

A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.

It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.

At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.

Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.

[smartcode_project:default project_id=152737 project_image_fid=377680]

Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.

"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.

The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.

More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.

&nbsp;

[smartcode_project_cta:default project_id=152737]

<h3 data-end="3697" data-section-id="q3n5ak" data-start="3672">&nbsp;</h3>
</main>

Jacob Robinson

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News