<p>Builder-developer Urban Property Group (UPG) is continuing to expand into new markets. UPG is heading to the Hills District, where it is planning a 40-storey mixed use building near Castle Hill Metro Station.</p>

<p>They've gone down the favoured developer route of a State Significant Development Application, which should see developments approved within the space of nine months.</p>

<p>The tower will comprise 371 apartments, 42 of which will be affordable housing, above a ground-floor retail precinct at 16-20 Old Castle Hill Road, on the corner of Garthowen Crescent and within walking distance of Castle Hill Metro Station, an area identified for higher density under both local and state strategic planning frameworks.</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/studiosc">Studio SC</a>, the tower would rise from a brick podium base, accommodating one retail tenancy and communal open space, before transitioning to a slender glazed residential form above. Six basement levels are proposed beneath the building to house parking and services.</p>

<p><img alt="First Look: Urban Property unveils 40-storey mixed-use tower in Castle Hill with 371 homes and affordable housing component" data-entity-type="file" data-entity-uuid="08dc82f9-b826-4e18-8c60-4c90f7472317" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%20G%20%28b%29%20-%20Ground%20level%20render.jpg?VersionId=EOv1ly45k_Bc1F73C0hdwXSG4FVSTETt" /></p>

<p>“Castle Hill is undergoing a significant transformation, evolving from a traditionally low-rise suburban centre into a true metropolitan destination anchored by the Sydney Metro Northwest," the Architectural Design Report prepared by Studio SC noted.</p>

<p>The majority of apartments (194) will be two-bedrooms. 90 one-bedroom apartments are planned, 83 three-beds, and four four-bedroom apartments.</p>

<p>Studio SC’s design adopts a podium-and-tower composition, with warm-toned masonry at the lower levels intended to anchor the building within its streetscape context.</p>

<p>"At the podium, the architecture is anchored through solid brickwork in warm, earthy tones, reflecting the local sandstone formations and the natural colour palette of the surrounding hills," Studio SC added.</p>

<p>Above, the tower transitions to a lighter glass expression, articulated with fins and tonal variation to reduce visual bulk and respond to changing light conditions.</p>

<p><img alt="First Look: Urban Property unveils 40-storey mixed-use tower in Castle Hill with 371 homes and affordable housing component" data-entity-type="file" data-entity-uuid="f13cb2ee-ebfc-4204-9aba-e2dbd9e5d4bd" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%20G%20%28a%29%20-%20Pool%20view.jpg?VersionId=Dnpusa.b5d6Nkx2clPlzWosDdh_1QW2V" /></p>

<p>Urban Property Group is one of Sydney's most active developers. They have projects currently under construction in Little Bay, Penrith, and Macquarie Park, with future projects earmarked for Wollongong.</p>

<p>Castle Hill has been one of the most popular suburbs for development across Sydney in the last five years, as developers scramble for land around the newly extended Sydney Metro.&nbsp;</p>

<p>Kassis Homes kicked it all off with Grand Reve, along with Deicorp who has delivered over 1,000 apartments in the area and continues to develop. The likes of Dubai-backed developer Arada will take to market their project in the coming months, while Masscon has just launched Avenue on Cadman Crescent.</p>


Joel Robinson

First Look: Urban Property Group unveils 40-storey mixed-use tower in Castle Hill

<p>One of the Gold Coast’s ‘bridesmaid suburbs’ is experiencing a wave of local suitors, with the latest sales figures from <a href="https://www.apartments.com.au/new-apartments/harbour-shores-biggera-waters-564-oxley-drive-biggera-waters-qld-4216">Harbour Shores</a> revealing over two thirds of buyers will be relocating from within a 5km average radius of the 16-hectare masterplan.&nbsp;</p>

<p><a href="https://www.apartments.com.au/developers/lewis-land-group">Lewis Land</a> Head of Development Michael Long said the figures underlined a powerful shift for Biggera Waters that would reshape it into a thriving force behind the region’s growth corridor.&nbsp;</p>

<p>“We’ve seen a huge wave of interest from residents of Arundel, Paradise Point and Runaway Bay who recognise the urban transformation that is well underway here and want to be part of it,” Long said.&nbsp;</p>

<p>“Interestingly, 25 per cent of our Gold Coast buyers are also coming from the city’s southern hotspots, including Burleigh and Palm Beach.&nbsp;</p>

<p>“<a href="https://www.apartments.com.au/developments/biggera-waters-qld-4216">Biggera Waters</a>, and Harbour Shores in particular, has all the advantages of waterfront living with the benefits of resort-style amenity, for greater value than the southern beachfront suburbs.”&nbsp;</p>

<p>[smartcode_project:default project_id=113271 project_image_fid=290031]</p>

<p>Long said half of the purchasers at Harbour Shores were under the age of 55.&nbsp;</p>

<p>“When locals choose to stay local, it creates a genuine community, turning the most sustainable master planned community in the Gold Coast’s history into a diverse and vibrant ‘village of villages’.”&nbsp;</p>

<p>[smartcode_project:default project_id=113271 project_image_fid=336743]</p>

<p><a href="https://www.apartments.com.au/project-marketer/colliers">Colliers</a> Gold Coast Sales Director David Higgins said the hyper-local market demand was unique to Harbour Shores when compared to other projects in the region.&nbsp;</p>

<p>“We are seeing as much as 60 per cent of new apartment sales on other projects go to interstate or international buyers, but Harbour Shores is bucking this trend and attracting a larger proportion of the local market,” Higgins said.&nbsp;</p>

<p>“Only 13 per cent of Harbour Shores’ existing purchasers are interstate. There has been a resounding endorsement from local buyers and that validates the project’s vision and investment in design, lifestyle and liveability.”&nbsp;</p>

<p>[smartcode_project:default project_id=113271 project_image_fid=4579]</p>

<p>Harbour Shores is 16ha visionary masterplan dedicated to wellness and an active, healthy lifestyle. Designed by <a href="https://www.apartments.com.au/architects/bda-architecture">BDA Architecture</a>, Harbour Shores embeds extensive green connections and more than 2.5km in pedestrian networks – including a 1.2km boardwalk along the water’s edge.</p>

<p>Harbour Shores was recently recognised by the BETTER FUTURE World Design Awards 2026 as a silver winner in the category of environmental sustainability. Boasting a 6 Star Green Star Communities V1.1 rating, Harbour Shores will deliver more than 2,000 homes over the next ten years.&nbsp;</p>

<p>The first stage will deliver three residential collections including luxury three and four-bedroom waterfront villas at The Residences, as well as apartments in The Waterline and Palm House, surrounded by resort-style amenities.&nbsp;</p>

<p>[smartcode_project_cta:default project_id=113271]</p>


Biggera Waters no longer a 'bridesmaid suburb' as Gold Coast locals jump to Harbour Shores

<p>Developer <a href="https://www.apartments.com.au/developers/ellipse-property-group">Ellipse Property</a> has officially launched Lily Lane, the second stage of its Carrington Place masterplan in Sydney’s North-West. The new stage will deliver over 200 apartments to the sought-after Hills District, supported by new retail and resident amenity.&nbsp;</p>

<p>Located near the Hills Showground Metro Station at 32 Carrington Road, Castle Hill, <a href="https://www.apartments.com.au/new-apartments/lily-lane-at-carrington-place-castle-hill-32-carrington-road-castle-hill-nsw-2154">Lily Lane</a> has launched with the release of 105 apartments.</p>

<p>Designed by award-winning architects <a href="https://www.apartments.com.au/architects/ptw">PTW</a>, Lily Lane comprises a combined total of 213 units over two 12-storey towers anchored by a ground-floor retail offering. A range of floorplan configurations are available including 67 one-bedroom, 100 two-bedroom and 46 three-bedroom apartments.</p>

<p>One-bedroom apartments are sized from 50-72 sqm with prices starting at $720,000, while two-bedrooms are priced from $960,000 with sizes ranging from 75 to 132 sqm. The three-bedroom floorplans are sized between 97 and 182 sqm, with prices starting at $1,350,000.&nbsp;</p>

<p>Six exclusive penthouses crown the Lily Lane towers, offering opulent interiors of up to 285 sqm. They are priced from $2.9 million.</p>

<p>[smartcode_project:default project_id=151821 project_image_fid=360285]</p>

<p>Blake Schulze, National Director – Residential at <a href="https://www.apartments.com.au/project-marketer/colliers">Colliers</a>, says Lily Lane builds on the sell-out success of Carrington Place’s first stage, Atrium.&nbsp;</p>

<p>“Lily Lane offers everything north-west buyers are seeking - including spacious, flexible floorplans with premium finishes and sweeping views of the Hills District to the north," Schulze said.</p>

<p>"Its central location brings residents even closer to Hills Showground Metro Station, with retail, dining, recreation and essential services at their fingertips.</p>

<p>Schulze says early enquiries reflect pent-up demand for Lily Lane’s three-bedroom and penthouse apartments, reinforcing the appetite for house-sized units in <a href="https://www.apartments.com.au/developments/castle-hill-nsw-2154">Castle Hill</a>,&nbsp;especially among downsizers.</p>

<p>Lily Lane has sought to incorporate features that are more&nbsp;traditional in freestanding homes. Over 75 per cent of residences include dedicated studies, multipurpose rooms or family rooms, with select layouts offering walk-in pantries and laundries.</p>

<p>Buyers have two interior colour schemes to choose from. ‘Breeze’ is a light-toned palette with warm timber accents, and ‘Dawn’ is a cooler mid-toned colourway.&nbsp;</p>

<p>[smartcode_project:default project_id=151821 project_image_fid=360572]</p>

<p>Apartments also feature premium Miele appliances, including ovens, washing machines, dryers, gas cooktops and dishwashers. Larger homes offer integrated Miele microwaves, Fisher &amp; Paykel integrated refrigerators and five-burner Miele cooktops.</p>

<p>Lily Lane’s ‘village-style’ architectural design is designed to maximise walkability and access to green space. Its two elegant towers are separated by a central landscaped laneway lined with lily plants, giving the project its name.&nbsp;</p>

<p>The towers will be crowned by rooftop terraces with BBQ areas offering views of the Hills District. Residents can also access a shared community room, complete with a fully equipped kitchen.</p>

<p>“As the gateway to the wider Carrington Place masterplan, this new stage delivers a premium experience,"&nbsp;said Puja Khanna, Associate Director – Design, Marketing and Sales at Ellipse Property.</p>

<p>"It features beautifully curated landscaping, refined interiors and architecture designed to maximise space, light and views. With a supermarket and essential services just minutes away, the addition of Lily Lane’s ground-floor retail will elevate everyday convenience and deliver a vibrant precinct for residents.”</p>

<p>[smartcode_project:default project_id=151821 project_image_fid=360286]</p>

<p>Lily Lane will be constructed by award-winning iCIRT-rated builder Decode Group, with construction to commence in mid-2026 and expected to complete early 2029.</p>

<p>Carrington Place comprises more than 800 apartments and is being delivered across multiple stages. Completion of the masterplan is expected in 2032. Integrated with neighbouring bushland, the project will feature over 20,000 square metres of outdoor recreational area, including a one-kilometre boardwalk to the nearby Fred Caterson Reserve.&nbsp;</p>

<p>The Hills Showground Metro Station is just a two-minute walk away, offering fast connectivity to Sydney’s CBD, North Sydney, Chatswood, Macquarie Park and Norwest Business Park.</p>

<p>[smartcode_project_cta:default project_id=151821]</p>


Ellipse launches Lily Lane, stage two of Carrington Place

<p><a href="https://www.apartments.com.au/developers/one-global-capital">One Global Capital</a>, a Sydney-based global property development and investment firm, is set to transform a 1.4-hectare site in Five Dock into a $1.5 billion mixed-use precinct.</p>

<p>The integrated precinct is planned to include 750 apartments across five residential towers, a 150-key hotel, around 10,000 sqm of retail and lifestyle space, as well as health and wellness facilities, extensive landscaped open space, and community amenities.</p>

<p>Planning approval submission is targeted for June 2026.</p>

<p>One Global Capital Founder Iwan Sunito told Apartments.com.au that the Five Dock site, which he has owned for over two decades, is one of the best he's ever had.</p>

<p>"I probably hadn't appreciated the uniqueness of the site until more recently when putting together the concept plans," Sunito says.</p>

<p>"The proximity to the water, and the golf course opposite, is unlike any other part of Parramatta Road. We have a unique position and view corridors over the water that makes this one of the best sites I've worked on."</p>

<p><img alt="Urban renewal in Five Dock via mixed-use precinct" data-entity-type="file" data-entity-uuid="76667592-c421-49f5-9ab8-45cfec815651" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Five%20Dock%201.png?VersionId=puhL_lSxd5IB5VA9fQKPsKHgmkinuwuI" /></p>

<p>Sunito said he wants to create a "city within a city", designing a multi-cultural precinct with the convenience of retail and public space at the forefront.</p>

<p>"We want to create a development that's not only to be seen, but to be experienced by the whole local community."</p>

<p>He adds that the Five Dock is emerging into a "really solid suburb", with the growth in&nbsp;the area continuing to be supported by rising residential values across the Canada Bay and Leichhardt local government areas, driven by major infrastructure investment and enhanced transport connectivity.&nbsp;</p>

<p>The new precinct will benefit from close proximity to a key transport network, including the Five Dock Metro Station, located approximately 1.1 kilometres from the site. The new Burwood Metro stop will be just 800m.</p>

<p>The project marks a renewed collaboration between Sunito and internationally acclaimed architect <a href="https://www.apartments.com.au/architects/koichi-takada-architects">Koichi Takada</a>, the creative partnership behind some of Sydney’s most recognisable residential landmarks, &nbsp;including Infinity, Arc, and Skye North Sydney.&nbsp;</p>

<p><img alt="Urban renewal in Five Dock via mixed-use precinct" data-entity-type="file" data-entity-uuid="a9184a45-f429-4628-87ce-9bd6c70cb597" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Five%20Dock%202.png?VersionId=zJZRfLAZCkpww5VcmR_wgRXjoaSgPSyv" /></p>

<p>“The concept for this development is born from our design approach to naturalising architecture," Koichi Takada said.</p>

<p>"The public realm benefits from biophilic design that integrates generous landscaping, and the development is optimised &nbsp;for natural daylight, airflow and water views to foster wellbeing, sustainability and spaces that foster community interaction."</p>

<p>A key feature of the mixed-use development will be a lifestyle retail precinct, offering shopping and dining &nbsp;experiences - including a proposed state-of-the-art car showroom - as well as communal spaces for community &nbsp;use. Veteran retail and commercial property practitioner, Simon McTigue, has been engaged to consult on the &nbsp;delivery and leasing of the retail precinct, having previously worked on notable mixed-use projects such as East &nbsp;Village Shopping Centre in Zetland and South Village Shopping Centre Kirrawee, as well as other projects with &nbsp;Iwan Sunito in Green Square and Parramatta, to name a few.&nbsp;</p>

<p>“The Five Dock site offers a unique opportunity for retailers, conveniently located within easy walking distance &nbsp;of the metro station. On completion, the integrated precinct will provide the community with a new Inner West &nbsp;town centre, offering daily convenience via a proposed large format supermarket and fresh food precinct, as well &nbsp;as a restaurant and café district situated alongside key services such as a medical and health centre. It will be a &nbsp;place to live, work and play,” said Simon McTigue, Director of Wallaringa Consulting.&nbsp;</p>

<p>Samuel Sunito, Director of Capital at One Global Capital, confirmed strong inbound interest from both domestic and global investors seeking co-investment opportunities in the project. “We are currently engaging with &nbsp;investors both locally but also globally from Indonesia, the United States, China, Singapore, Vietnam, and Dubai &nbsp;to ensure alignment of vision and long-term value creation,” he said.&nbsp;</p>

<p>Investment participation will remain open until approximately Q2 2026, with equity allocations managed selectively.&nbsp;</p>

<p>“Equity available to the broader market will be limited, with priority given to long-standing capital partners. In terms of One Global Capital’s investment philosophy, we will continue to retain majority ownership, ensuring &nbsp;strong alignment of interests and preserving the long-term integrity of the project for all stakeholders,” Samuel &nbsp;said.</p>


"A city within a city": Iwan Sunito flags $1.5 billion mixed-use precinct in Five Dock

<p>Holiday home buyers who have long gravitated to Queenstown’s alpine setting are increasingly looking for low-maintenance apartments that allow them to lock up and leave, while still generating income when they’re away.</p>

<p>For Wendy, who had spent years visiting the Queenstown and Arrowtown region, <a href="https://www.apartments.com.au/developers/safari-group">Safari Group</a>’s Mountain Oak Apartments provided the opportunity to formalise what had previously been a recurring holiday pattern.</p>

<p>“We always had Queenstown in the back of our minds to buy something there as a holiday home,” she says. “We love the Queenstown and Arrowtown area.”</p>

<p><img alt="From slopes to markets: Mountain Oak connects residents to the best of Queenstown" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_auto/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/658d4f_48c3ec1ae5df4a2cab7d23c07c7f51b3~mv2.jpg?VersionId=27K8oQ4ExDN8Yu70VHDa9Olq59XU36m3" /></p>

<p>Time spent visiting her sister-in-law, who owns in Arrowtown, along with regular stays at Millbrook Resort, had already shaped a strong personal connection to the region.&nbsp;</p>

<p>Rather than approaching the purchase purely as an investment play, Wendy’s starting point was lifestyle.</p>

<p>“We were more thinking about ourselves and where we could stay, and then the rental aspect was second.”</p>

<p>Mountain Oak Apartments, located within the masterplanned Remarkables Park precinct in Frankton, aligned with that thinking. The ability to secure the apartment with a deposit and settle on completion made the timing work.</p>

<p>“The fact that we could put a deposit down with the balance on completion was a bonus for us,” she explains.</p>

<p><img alt="Safari Group’s Mountain Oak Apartments brings new investment potential to Queenstown" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_auto/https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/313_Livingv2_WEB.jpg?VersionId=nV229fM0ZeYpoxOrX372HyGjfwY_LR8c" /></p>

<p>Wendy selected a two-bedroom, two-bathroom penthouse, a configuration that supports both private use and guest flexibility.</p>

<p>“The two-bedroom, two-bathroom configuration appealed from both a rental viewpoint and for the ability to have friends stay while we are there,” she says.</p>

<p>Across the development, two-bedroom apartments range from 64sqm to 78sqm, with two-bedroom plus flexi options from 71sqm to 75sqm, each with an allocated car park. The flexi layouts introduce an additional space suited to work or hobbies, reflecting demand from buyers who split their time between leisure and remote work.</p>

<p>Apartments include underfloor heating in bathrooms, heat pumps to living areas, and joinery positioned to maximise natural light and mountain outlooks. The Remarkables Park precinct is known for its extended winter sunshine hours, water frontage and open views toward The Remarkables.&nbsp;</p>

<p>Units come in light and dark interior colour schemes.</p>

<p><img alt="Mountain Oak Apartments draws holiday home buyers to Queenstown" data-entity-type="file" data-entity-uuid="fd685a22-3b95-43a1-87cb-48fdd42bb4ba" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/658d4f_f9f89107c2704ebbbe5a6b36da508cb3~mv2.jpg?VersionId=MigFIEm6b.mrANANwxSmwHvC4RdJUuyR" /></p>

<p>While lifestyle was the primary driver, the fundamentals of the Queenstown market added reassurance.&nbsp;</p>

<p>“Proximity to the airport and tourism being the main attraction all year round,” Wendy says, when asked what stood out from an investment perspective.</p>

<p>Mountain Oak sits just eight kilometres from Queenstown’s CBD and around a two-minute drive from Queenstown Airport.&nbsp;</p>

<p>For Wendy, that airport proximity carries practical value.</p>

<p>“The airport proximity is a bonus, we think that being so close will be an attraction for the convenience side.”</p>

<p>Residents are also a short drive from Coronet Peak, Jack’s Point Golf Course, New World Supermarket, Five Mile Shopping Centre, and the dining, medical, gym, cinema and library amenities within the town centre, as well as the seasonal Remarkables Market.</p>

<p>Importantly, the purchase does not lock owners into a single use. Mountain Oak offers the flexibility to opt for short-term visitor accommodation or longer-term residential rental management, with 365-day visitor accommodation consent in place. Owners can utilise Safari Group’s 24/7 on-site management service or appoint their own provider, and do not need to decide on a strategy immediately.</p>

<p>“It was a bonus that we can rent it out as well as use it for ourselves,” she says.</p>

<p>Additional buying options, including furniture packages and storage units available for purchase within the building, further support a lock-and-leave model suited to interstate and overseas owners.</p>

<p><img alt="Safari Group’s Mountain Oak Apartments brings new investment potential to Queenstown" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_auto/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Ext_Cam15_Sunny.jpg?VersionId=SJAROUM_1s.Tr5ciMk4EEj5oAt_Vewmv" /></p>

<p>Mountain Oak Apartments comprises 141 residences, ranging from one-bedroom configurations through to larger apartments and penthouses. One-bedroom apartments are currently priced from NZ$639,000, with three-bedroom options from NZ$1,299,000.</p>

<p>With 365-day visitor accommodation consent, the development is structured to respond to Queenstown’s established four-season tourism economy, spanning winter ski traffic and summer hiking, cycling, golf and lake-based activity.</p>

<p>Although Wendy acknowledges the strength of rental demand, her approach remains long term.</p>

<p>“We’re not planning to sell it anytime soon, so we are keen to hang on to it, but the passive income will be a bonus.”</p>

<p>Confidence in the developer also influenced her decision. Before proceeding, Wendy sought feedback within the local building community.</p>

<p>“We asked around and Safari Group had a good reputation,” she says.</p>

<p>Safari Group has delivered more than 2,000 hotel units and residential apartments across over 18 developments nationwide, with more than 25 years’ experience in the sector.</p>

<p>With completion anticipated by mid-2027, Mountain Oak is attracting a cross-section of buyers, from yield-focused investors to lifestyle purchasers seeking a foothold in one of New Zealand’s most tightly held alpine markets.</p>

<p>For Wendy, it represents both a future holiday base and a long-term asset within Queenstown’s year-round tourism economy.</p>


How Mountain Oak Apartments draws holiday home buyers to Queenstown

Company Tax

<html><body>
<p>They’re at it again, pushing lower company tax as a way to resuscitate the economy.</p>
<p>The arguments were well ventilated at the time the government pushed for company tax cuts, failed to get support in the Senate, and then abandoned them in favour of personal income tax cuts in the leadup to the last election, declaring “we’re not coming back to the company tax cuts”.</p>
<p>The new argument is that they’ll help get us out of recession, but in the same sense that Leo Tolstoy observed that while all happy families resemble each other, each unhappy family is unhappy <a href="https://www.britannica.com/biography/Leo-Tolstoy/Anna-Karenina" target="_blank">in its own way</a>, each recession is different.</p>
<p>This recession is the result of the forced hibernation of large parts of the economy in order to reduce the spread of COVID-19.</p>
<h2>This recession is about households</h2>
<p><a href="https://images.theconversation.com/files/350383/original/file-20200730-17-14n6v9d.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/350383/original/file-20200730-17-14n6v9d.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=237&amp;fit=clip" alt=""></a></p>
<p><span class="caption">The first priority will be household spending.</span></p>
<p>When the time is right, it will be households that hold the key to reversing the effects of hibernation.</p>
<p>Australian households account for 60 cents in every dollar spent in the Australian economy, and they accounted for a disproportionate share of the fall in GDP in the first half of 2020.</p>
<p>With shops and cafes shut, the need for investment in new facilities is low.</p>
<p>The first step to recovery has to be reopening the businesses that exist and are closed or are operating well below capacity.</p>
<p>This means getting households spending, supported by stimulus.</p>
<h2>Company tax cuts benefit foreigners</h2>
<p>Our modelling in 2018 showed that while a company tax cut would stimulate investment and economic activity, in both the short run and the long run the benefits would accrue to <a href="https://www.copsmodels.com/elecpapr/g-287.htm" target="_blank">foreign investors</a> rather than to Australians.</p>
<p>In theory, all investors should respond positively to a lower company tax rate, but under Australia’s system of <a href="https://theconversation.com/words-that-matter-whats-a-franking-credit-whats-dividend-imputation-and-whats-retiree-tax-111423" target="_blank">dividend imputation</a> local investors are shielded from company tax, meaning the cuts matter most for those overseas.</p>
<p>Those overseas investors would be likely to invest more in Australia after a company tax cut, boosting Australia’s capital stock (buildings and equipment) making workers more valuable, pushing up wages. </p>
<p>While sold as a plus, higher wages would make it harder for locally-owned businesses. Our modelling found the biggest losers would be in the retail, <a href="https://theconversation.com/big-business-doesnt-want-to-talk-about-it-but-smes-lose-from-a-company-tax-cut-57965" target="_blank">health care and education industries</a>.</p>
<p>With foreign investors paying less tax, the local population would bear the consequences of spending cuts or higher taxes, broadly negating the benefit of higher wage growth.</p>
<h2>COVID makes the case weaker</h2>
<p>As well, much of the company tax cut would be ‘wasted’ providing a windfall gain to foreign investors already in Australia.</p>
<p>The case for a company tax cut is now weaker, not stronger, than it was in 2018.</p>
<p>Budget deficits will reach new highs in 2019-20 and 2020-21. It is the right policy for the circumstances we are in, but it will leave future governments with difficult decisions about budget repair.</p>
<p>When the economy is strong enough, taxpayers could face deficit repair levies, bracket creep, new taxes, and the broader application of existing ones.</p>
<p>It is for this reason that the <a href="https://www.imf.org/%7E/media/Files/Publications/covid19-special-notes/special-series-on-covid-19-tax-law-design-considerations-when-implementing-responses.ashx" target="_blank">International Monetary Fund</a> warned against knee-jerk tax changes during the crisis and said:</p>
<p><em>a premium should be placed on measures that move the tax system in desirable directions – specifically: refrain from tax holidays; keep environmental taxes; do not cut corporate income tax rates</em></p>
<p>If the company tax rate was to be cut now, it would be difficult later to restore it to where it was when it was needed.</p>
<p>The smaller tax contribution by foreign investors would mean more of the adjustment would fall on us.</p>
<h2>And investors may well find us increasingly attractive</h2>
<p>Another fresh reason to be cautious about a cut in company tax is that Australia’s relative attractiveness as an investment destination might well improve.</p>
<p>We have suffered, but most of the world has suffered the same or worse.</p>
<p>Deciding where to invest their next dollars, investors might well form the view that our response to the pandemic has been better than those of other destinations such as the United States, Britain and Brazil.</p>
<p>One of the benefits of being a peaceful, well-managed resource-rich Western democracy is that when things are bad elsewhere foreign investors look here.</p>
<p>We might continue to find (as we have in the past) that we get all the foreign investment we can handle with our company tax rate as it is.<img src="https://counter.theconversation.com/content/143622/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;"></p>
<p><span><a href="https://theconversation.com/profiles/janine-dixon-11006" target="_blank">Janine Dixon</a>, Economist at Centre of Policy Studies, <em><a href="https://theconversation.com/institutions/victoria-university-1175" target="_blank">Victoria University</a></em> and <a href="https://theconversation.com/profiles/jason-nassios-318488" target="_blank">Jason Nassios</a>, Senior Research Fellow, Centre of Policy Studies, <em><a href="https://theconversation.com/institutions/victoria-university-1175" target="_blank">Victoria University</a></em></span></p>
<p>This article is republished from <a href="https://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/post-covid-therell-be-less-of-a-reason-to-cut-company-tax-than-before-143622" target="_blank">original article</a>.</p>
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j.ballantyne1990-6AQqhLzZaK

Post-COVID, there’ll be less of a reason to cut company tax than before

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<p>GUEST OBSERVATION</p>
<p>The latest figures put Australia near the top when it comes to company tax collections, even though our total tax take isn’t particularly high.</p>
<p>In international tax circles, as in other areas, we often talk about American exceptionalism.</p>
<p>But these days, it is becoming increasingly clear that Australia is exceptional in taxation, among members of the Organisation for Economic Co-operation and Development and indeed, compared to countries around the globe.</p>
<p>The OECD has just produced its <a href="https://www.oecd.org/tax/beps/corporate-tax-statistics-database.htm" target="_blank">first-ever detailed comparison</a> of company tax collections and rates and effective rates around the world. The “statutory” or headline rate comparisons cover 94 countries. The harder to calculate “effective” tax comparisons cover 88 countries.</p>
<p>The bad news – for companies – is that Australia is close to the top among the 94 countries, and in one of the measures, the effective marginal company tax rate (more on this later), third from the top.</p>
<p>Click <a href="https://images.theconversation.com/files/253830/original/file-20190115-152971-1oevmqr.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip" target="_blank">here</a> to enlarge.</p>
<p><a href="https://images.theconversation.com/files/253830/original/file-20190115-152971-1oevmqr.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/253830/original/file-20190115-152971-1oevmqr.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a></p>
<p>Interestingly, in another recent report, the OECD shows that Australia clearly falls into the “low tax” group among OECD countries, with a tax-to-GDP ratio <a href="http://www.oecd.org/tax/tax-policy/revenue-statistics-2522770x.htm">below 25%</a>. But within that context we rely heavily on company tax.</p>
<p><strong>Company tax revenues are high</strong></p>
<p>Australia’s A$80 billion in company tax collections in 2016 was about 4.6% of GDP, ranking Australia twelfth out of the 88 countries for which the OECD had information.</p>
<p>Company tax accounted for 16% of Australia’s total tax revenue, the 27th highest out of the 88 countries.</p>
<p>The statistics have oddities. Luxembourg and Switzerland also have a high share of company tax revenues because they attract so much global capital. In contrast, the overall high-taxing countries of France, Denmark and Finland collect much less revenue from company tax.</p>
<p>Click <a href="https://images.theconversation.com/files/253831/original/file-20190115-152968-kcvom4.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip" target="_blank">here</a> to enlarge.</p>
<p><a href="https://images.theconversation.com/files/253831/original/file-20190115-152968-kcvom4.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/253831/original/file-20190115-152968-kcvom4.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> </p>
<p><strong>Headline rates are heading down</strong></p>
<p>Corporate tax rates have been trending down for at least two decades. The Trump tax changes in 2017 that lowered the US federal rate to 21% was the latest dramatic change, but the United Kingdom now has a rate of 19% and many European countries sit at or below 25%. The change since 2000 has been dramatic and the global average is now 20%.</p>
<p>In our Asian region, the average headline corporate tax rate is 15%. As a result of <a href="https://www.oecd.org/investment/investment-policy/Towards-smarter-use-of-tax-incentives-in-Southeast-Asia.pdf" target="_blank">tax incentives available around Asia</a>, companies involved in manufacturing and supply chains often face a lower, or zero, rate.</p>
<p>This trend was identified by the Henry Tax Review in 2009, which recommended transitioning to a 25% rate, which today could be financed with a 1% increase in Australia’s GST rate, according to <a href="https://www.policyforum.net/australia-can-afford-cut-company-tax/" target="_blank">recent modelling by Chris Murphy</a>.</p>
<p>Click <a href="https://images.theconversation.com/files/253833/original/file-20190115-152983-16aslqh.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;h=524&amp;fit=crop&amp;dpr=1">here</a> to enlarge.</p>
<p><img src="https://images.theconversation.com/files/253833/original/file-20190115-152983-16aslqh.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""> </p>
<p><strong>What matters are effective tax rates</strong></p>
<p>The OECD also compares effective marginal tax rates (EMTRs), and effective average tax rates (EATRs), for corporate investment. These combine the headline rate with the rules for corporate investment, depreciation allowances for plant and equipment, and intellectual property investment.</p>
<p>In theory, investors choose to invest based on the expected after-tax rate of return, taking into account tax breaks and special rules.</p>
<p>The EMTR determines the tax cost of expanding an existing investment: putting one more dollar into that investment. In the EMTR ranking, Australia is third highest.</p>
<p>Countries that provide a tax break known as <a href="https://theconversation.com/how-the-government-can-pay-for-its-proposed-company-tax-cuts-92739" target="_blank">allowance for corporate equity</a>, including Belgium and Italy, actually have negative tax rates on increased investment.</p>
<p>The EATR reflects the tax rate that would be paid on an entire new investment. In the EATR ranking, Australia is, again, near the top in ninth place, at 30% – the same as our statutory rate.</p>
<p>Click <a href="https://images.theconversation.com/files/253834/original/file-20190115-152980-11hzrfk.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip" target="_blank">here</a> to enlarge.</p>
<p><a href="https://images.theconversation.com/files/253834/original/file-20190115-152980-11hzrfk.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/253834/original/file-20190115-152980-11hzrfk.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a></p>
<p>Unlike many other countries, Australia has few tax incentives. We do not have a low tax regime for intellectual property or accelerated depreciation for new equipment – except for small businesses, and mining exploration. Only in research and development did Australia provide higher tax subsidies than some other countries and the R&amp;D concession is <a href="https://www.budget.gov.au/2018-19/content/factsheets/6-tax-integrity" target="_blank">being tightened</a>.</p>
<p>Overall, Australia’s high rate and broad corporate tax base makes new investment, or the expansion of existing investment, expensive relative to other countries.</p>
<p><strong>Why are we such an outlier?</strong></p>
<p>Australia is a resource extraction and exporting economy.</p>
<p>We haven’t had to compete quite as hard for foreign investment as other countries.</p>
<p>Our relatively high rate of company tax serves two purposes: to tax company profits and to get a fair return on resources in the ground which state governments, through royalties, don’t properly charge for.</p>
<p>And we are geographically isolated, meaning that, even in the global digital economy, it is hard for companies to service us from offshore. Many have to be here and subject to tax.</p>
<p>Also, and importantly, our reliance on corporate tax is not as dramatic as it seems, because of our almost unique dividend imputation system. About one third to one half of corporate tax revenues are handed back to shareholders in credits against company tax already collected. (New Zealand, which has an imputation system, also has high corporate tax revenues).</p>
<p>Kevin Davies suggests that the “real” corporate tax rate in Australia, taking account of dividend imputation, is <a href="https://theconversation.com/australias-company-tax-burden-is-just-a-myth-10433" target="_blank">below 20%</a>.</p>
<p>But that assumes a closed economy. The reality is that the imputation system subsidises some domestic investors – especially tax-free retirees with self managed super funds – while pushing the full weight of company tax onto foreign investment, at the expense of the economy as a whole, and at the expense of Australians who could potentially benefit from that investment.</p>
<p>The political heat generated by Labor’s proposal to end the payment of imputation cheques to <a href="https://www.afr.com/personal-finance/superannuation-and-smsfs/retirees-mobilise-to-stop-franking-credit-change-20181119-h18290" target="_blank">retirees who don’t pay tax</a> shows their high value to domestic investors. Self-managed super funds are <a href="https://www.intelligentinvestor.com.au/the-franking-elephant-in-the-room-1888156" target="_blank">massively overweight in stocks that provide imputation credits</a>, skewing the Australian share market and the dividend policy of our largest companies.</p>
<p><strong>Does it matter?</strong></p>
<p>Australia’s high company tax rate, and the bias in our imputation system against foreign equity, mean that large multinationals will increasingly borrow to finance Australian investment rather than issue shares.</p>
<p>They will get tax deductions for outbound flows of interest, service fees and royalties, while shifting more and more of their sales, marketing and intellectual property offshore where they can.</p>
<p>Australia can, and is, clamping down on profit shifting, but it’s a never-ending battle.</p>
<p><a href="https://taxpolicy.crawford.anu.edu.au/publication/ttpi-working-papers/12644/australias-high-company-tax-rate-and-dividend-imputation-poor" target="_blank">A bold suggestion </a>is that we should scrap our system of dividend imputation and use the money saved to dramatically cut the rate of company tax. It would make Australia much more attractive to foreign investors, although much less attractive to retirees.</p>
<p>Another idea <a href="https://theconversation.com/heres-a-long-term-budget-fix-that-would-boost-investment-replace-company-tax-with-cashflow-tax-108347" target="_blank">aired in The Conversation late last year</a> is that we should make new capital investment fully tax deductible, turning company tax into a “cashflow tax”.</p>
<p>What we’ll probably end up with is a compromise – a combination of permitting greater deductions for new investment and lowering the rate will be the answer, while limiting or ending dividend imputation.</p>
<p>There’s much to be proud of in being a weird mob.</p>
<p>But as David Ingles and I argued in a <a href="https://taxpolicy.crawford.anu.edu.au/publication/ttpi-working-papers/12216/australias-company-tax-options-fiscally-sustainable-reform" target="_blank">research paper</a> last year, it is not smart to ignore what’s happening in other places.</p>
<p>It is true we are geographically isolated, and it is true our resources make us different, but we exist in a global tax environment in which investors consider tax when they decide where to put their money. It is beyond our control.</p>
<p><em><strong>Miranda Stewart </strong>is a Professor at the University of Melbourne</em></p>
<p><em>This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/new-figures-put-it-beyond-doubt-when-it-comes-to-company-tax-we-are-a-high-tax-country-in-part-because-it-works-well-for-us-109875" target="_blank">original article</a>.</em></p>
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When it comes to company tax, we are a high-tax country, in part because it works well for us: Miranda Stewart

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<p>GUEST OBSERVER</p>
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<div class="column">The Department of Finance released the March monthly financial statements on Friday.</div>
<div class="column"> </div>
<div class="column">This note examines the latest data.</div>
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<br>Budget improves: In the twelve months to March 2017, the Budget deficit stood at $38.6 billion (around 2.3 per cent of GDP), up from $37.53 billion deficit in the year to February but better than the average deficit over the past year of $39.3 billion. Average growth in company tax revenues in the last three months has been the best in 41⁄2 years.</div>
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<br>Lower-than-expected deficit: The Department of Finance says the “the underlying cash balance for the financial year to 31 March 2017 was a deficit of $38,907 million, which is $1,361 million lower than the 2016-17 Mid-Year Economic and Fiscal Outlook (MYEFO) profile deficit of $40,267 million.”</div>
<div class="column"> </div>
<div class="column">The Federal Budget remains on track to meet Government forecasts. Not only are rolling annual aggregates showing improvement, so are the so-called ‘profile’ positions estimated by the Department of Finance.</div>
<div class="column"> </div>
<div class="column">The Government continues to exercise spending restraint. In fact expenses or payments were $1.5 billion below the so-called ‘profile’ level or government estimates for this point in the year. Revenue also is lifting, $335 million above government forecasts. And the rolling annual level of revenues is growing at a 6.2 percent annual pace, faster than growth in payments for the 23rd straight month.</div>
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<div class="column"><a href="https://www.propertyobserver.com.au/images/2017/05/08/Screen%20Shot%202017-05-08%20at%208.06.24%20AM.png" target="_blank">Click to enlarge</a></div>
<div class="column"><img src="https://www.urban.com.au/images/2017/05/08/Screen%20Shot%202017-05-08%20at%208.06.24%20AM.png" alt=""></div>
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<div class="column">The Budget is currently in a stronger position than the government’s finance boffins have estimated. The good news is that improvement is coming from both sides of the balance sheet.</div>
<div class="column"> </div>
<div class="column">GST revenues are also lifting, currently at record highs for a 12-month period. Spending is growing faster than the growth rate of retail trade suggesting that businesses and service sectors are doing better than goods-dependent operations.</div>
<div class="column"> </div>
<div class="column">What do the figures show?</div>
<div class="column"> </div>
<div class="column">The underlying Budget deficit for the twelve months to March 2017 stood at $38.6 billion (around 2.3 percent of GDP), up from $37.53 billion in the year to February.</div>
<div class="column"> </div>
<div class="column">Smoothed revenues (twelve months to March) were up 6.2 percent on a year ago just down from 6.3 percent in January which was the fastest growth in 42 months.</div>
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<div class="column">Expenses rose by 4.3 percent over the same period.</div>
<div class="column"> </div>
<div class="column">In terms of the fiscal balance, the Department of Finance noted: “The fiscal balance for the year to 31 March 2017 was a deficit of $37,365 million, which is $6,381 million lower than the 2016-17 MYEFO profile deficit of $43,746 million. The difference results from higher than expected revenue and lower than expected expenses.”</div>
<div class="column"> </div>
<div class="column">Revenues: “Total receipts were $334 million higher than the 2016-17 MYEFO profile.”</div>
<div class="column"> </div>
<div class="column">Expenses: “Total payments were $1,516 million lower than the 2016-17 MYEFO profile.”</div>
<div class="column"> </div>
<div class="column">The Government currently expects an underlying deficit of $36.514 billion for 2016/17 (around 2.3 per cent of GDP).</div>
<div class="column"> </div>
<div class="column">Receipts from the Goods and Services Tax stood at a record $62.0 billion in the twelve months to March, up 5.7 percent on a year ago, and above the 5.4 per cent growth over the last twelve months. The Government has forecast GST receipts of $62.41 billion for the entire 2016/17 year.</div>
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<div class="column">Actual GST receipts for the nine months to March stood at $46.331 billion, just below the Budget ‘profile’ of $46.349 billion.</div>
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<div class="column">What is the importance of the economic data?</div>
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<p><span>The Department of Finance releases the </span><span>Government Financial Statements </span><span>(Niemeyer Statement) almost every month. The statement allows investors to track the current Budget position and provides insights into the effectiveness of fiscal policy. </span></p>
<p><span>What are the implications for interest rates and investors? </span></p>
The Federal Budget is on track to meet forecasts. Spending restraint is driving the improvement. Fiscal policy is more neutral at present, as is monetary policy.</div>
<div class="column"> </div>
<div class="column">There is no room for complacency. The Budget may be showing cyclical improvement, but in 2017 all political parties need to stay focused on fundamental tax reform to drive medium-term improvement in the fiscal position.</div>
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<div class="column"><a href="https://www.propertyobserver.com.au/images/2017/05/08/Screen%20Shot%202017-05-08%20at%208.05.21%20AM.png" target="_blank">Click to enlarge</a></div>
<div class="column"><img src="https://www.urban.com.au/images/2017/05/08/Screen%20Shot%202017-05-08%20at%208.05.21%20AM.png" alt=""></div>
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<br>One missing ingredient in recent times has been the absence of growth in company tax revenues. But average growth in the last three months has been the strongest in 41⁄2 years. </div>
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