THE Real Estate Institute of Queensland (REIQ) is accusing the Queensland Government of "dipping into the piggy bank of property owners yet again" with a new land tax regime which "is a slap in the face to the very sector that is propping up the economy".

The REIQ's reaction has come off the back of the Queensland Government pocketing soaring stamp duty revenue with $5.38bn in transfer revenue this financial year, as announced by State Treasurer Peter Dick. It will increase overall from $16.53bn to $19.93bn over the forward estimates.

REIQ CEO Antonia Mercorella said disappointingly the government had not consulted with relevant property stakeholder groups on this new land tax regime, which was "the wrong move at the wrong time". Under the Treasurer's announcement, interstate property investors with multiple landholdings across different states would have their annual land tax assessment based on the worth of all their land, rather than just the worth of their Queensland property. However, primary places of residence would continue to be exempt. 

“This treatment of property investors as an endless money pit is outrageous – the government is raking in a huge stamp duty windfall, then relying on private investors to provide the lion’s share of housing supply, and now they’re slapping investors yet again with new taxes,” Ms Mercorella said.

“How can the government possibly justify slugging property investors with tax for land they own that isn’t even within our state borders? It’s utter nonsense that there’s a 'loop hole' to close.

“From a practical standpoint, it’s also baffling to understand how on earth they intend to get this data in order to double-tax investors who are already paying this tax elsewhere.”

Ms Mercorella said that property investors were tired of being the ATM for the State and given the flagged second wave of tenancy rental reforms, many could decide to vote with their money.

“There is no other state or territory that takes this approach, and by treating property investors with contempt like this time and time again, investors may very well pull up stumps,” Ms Mercorella said.

“All this is doing is deterring people from investing in Queensland and instead, opting to invest where no multi-jurisdictional land tax applies.

“For those not scared off from investing in Queensland, and current investors brave enough to stick around, this tax will make their holding costs more expensive and the logical consequence of that is that rent goes up.

“In the midst of a rental crisis, it beggars belief that this would be the lever the government pulls. It shows the government lacks the ability to think outside the square and come up with alternative and innovative solutions to find new revenue streams.

“You only have to look at the timing of this bombshell legislative reform to see the government is clearly trying to sneak this in under the radar at a time most people have clocked off for the year.”

www.reiq.com.au

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CONFIDENCE in Australia’s economic outlook has increased over the past six weeks but accountants are still more likely to be worried, according to a new survey by professional accounting body, CPA Australia.

In early October, CPA Australia surveyed 144 accounting professionals as part of a longitudinal survey of economic and business sentiment, coinciding with the implementation of the National COVID-19 Response Plan. CPA Australia's previous survey was conducted in August.

“General economic sentiment has lifted, which is positive, however accountants remain more likely to be pessimistic notwithstanding rising vaccination rates,” CPA Australia chief executive Andrew Hunter said.

“We think this reflects ongoing uncertainty about re-opening requirements and what they’ll mean for businesses, their employees and customers, as well as how future outbreaks will be managed.” 

About 32 percent of respondents are confident in the performance of the Australian economy over the next three months, compared with 20 percent in August, while 42 percent are worried compared with 51 percent in August.

The level of optimism increases as longer outlook periods are considered. About 44 percent expressed confidence in the state of the economy in 12 months time,  up from 30 percent in August.

CONFIDENCE OVER NEXT THREE MONTHS

Respondents were more enthusiastic when it came to their own workplaces. About 68 percent were fairly or extremely confident in the performance of their business over the next three months. Only 14 percent are fairly or extremely worried.

About 31 percent of respondents expect their business’s or employer’s revenue to increase this month, compared with 29 percent in August. Meanwhile, 44 percent expect revenue to decrease, which was the same in August.

In an unexpected result, less than one third of respondents (28.5%) reported that government business supports have had a positive or very positive impact on their business and business clients.

“This surprised me, and I can’t say for certain why respondents feel this way," Mr Hunter said. "But from talking with members and businesses, I’d suggest that it’s a consequence of challenges associated with the design, roll-out and administration of support and grant programs, and the fact that many businesses weren’t eligible despite experiencing difficulties.

“Issues such as these have left a sour taste in the mouth of many accountants. They’ve been the ones trying to make hastily designed and often vague support schemes workable for business. Our members have worked incredibly hard over the past 18 months assisting their clients or employers access this much needed support quickly.

“We encourage governments to consult early, openly and often with professional and industry associations on the design, structure and administration of support schemes before implementation. This will enhance their effectiveness once introduced.”

Respondents working in businesses remain very confident in their employer’s ability to repay any debts over the next three months. This is despite the closure of several grant programs since that time and the impending closure of others. Only 14 percent expect their business to have difficulty in repaying their debts over the next three months.

“The good news is that business solvency isn’t a major factor at this time," Mr Hunter said. "This suggests we don’t need to be overly concerned, at least for now, about an upcoming insolvency cliff after supports roll off. That said, we know many businesses will face very tough trading conditions for some time.”

SHORT TERM EMPLOYMENT OKAY

The short-term employment outlook is also positive. Respondents are now more likely than they were in August to expect their employer to increase employee numbers over the next three months (33% compared with 23%). Respondents were also more likely to forecast an increase in staff hours over the next three months, as well as work outsourced to contractors.

“Businesses in locked-down states are making plans for the return of customers," Mr Hunter said. "This increases the urgency for governments to provide answers about what they can and can’t do when they re-open.”

CPA Australia has previously published 10 questions businesses need answers to before re-opening, and is seeking answers to these from governments.

Although confidence in the economy, business and employment grew over the past two months, there remain numerous short-term challenges for businesses. The number one difficulty continues to be uncertainty around lockdowns, followed by attracting and retaining staff. About 62 percent of respondents also said border closures had a negative, or very negative, impact on their businesses.

“With international travel slated to resume in November under the National Response Plan, albeit slowly, this should alleviate some issues for businesses," Mr Hunter said. "However, relief may be way off yet for businesses in states which have said they may remain closed into the new year.”   

Although awareness of the National COVID-19 Response Plan has increased from CPA's previous survey, respondents were more likely than before to find it unclear, at 46 percent compared with 39 percent in August.

cpaaustralia.com.au

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AUSTRALIAN financial pundits overwhelmingly believe that crypto currencies -- not particularly Bitcoin -- will continue to rise against the dollar and will also become a valuable asset in a diversified portfolio.

Research by international cryptocurrency platform Gemini has also found about 32 percent of investors said they would invest more when cryptocurrencies are regulated. About 34 percent said they would also invest when they have more information about such currencies.

However, Bitcoin's erratic moves confuse the issue. The meteoric rise and subsequent volatility of Bitcoin has many Aussies considering whether digital assets have a place in an investment portfolio, often comparing cryptocurrencies against more traditional asset classes, such as property.

Now, as concerns grow over inflation and an economic slump – motivating many investors to look for new ways to protect their assets – the latest survey reveals that 63 percent of Australian cryptocurrency enthusiasts view crypto as a valuable asset in a diversified portfolio, and 59 percent believe its value will outpace the dollar. 

The findings are derived from a survey of an independent panel of 1,010 Australians who have, or currently do, invest in crypto, commissioned by global crypto platform Gemini. Respondents comprised 55 percent of people who invest in crypto and 45 percent who have invested in crypto before.

The survey revealed that millennials, in particular, value cryptocurrency as an investment option: 72 percent of 25–34-year-olds believe it is a valuable asset in a diversified portfolio, compared with 57 percent of over-55s.

More than half (59%) of respondents believe crypto, like gold, will continue to grow against fiat currencies over the long term, while a further 8 percent believe crypto is a better investment than gold.

Gemini Asia-Pacific managing director, Jeremy Ng said, “Both cryptocurrency and gold are often seen as ways to hedge against inflation. Gold has historically been considered a safe-haven asset. However, Bitcoin and several other cryptocurrencies have experienced meteoric growth and offer unique, innovative features that make them stand out.

“Some cryptocurrencies have the potential to benefit investors by creating tools and resources that support the growth and exchange of value outside of traditional financial institutions, without the need for an intermediary. The blockchain technology that underlies crypto can be applied to a large range of industries, beyond simply money and finance," he said.

The total global cryptocurrency market cap in September 2020 was at around A$529 billion. As of September 2021, it was A$2.9 trillion -- according to the report Total Cryptocurrency Market Cap, 2021 (coinmarketcap.com/charts/) -- almost one trillion dollars more than Australia’s GDP as outline in an Austyrade report.

Given this exponential growth, Gemini has found through the survey that Aussies are torn when deciding whether it is too late to invest in Bitcoin at its current price (A$46,000 at the time of the survey), with 51 percent of respondents believing it was too late.

However, Mr Ng said crypto was still only in the early stages of development.

“We are beginning to see the gradual adoption of cryptocurrency into the mainstream," he said. "As technology continues to develop, so will money and the systems that underpin it. While fiat currency remains the dominant form of money, cryptocurrencies and the blockchain technology that supports them may very well represent the next step in the evolution.”

Criticism levelled against fiat currency is that its perceivable worth is directly influenced by decisions made by central authorities, namely governments and central banks, making it susceptible to inflation. Most cryptocurrencies, on the other hand, are decentralised, meaning no single authority can dilute their value by simply issuing more. He said Bitcoin, in particular, was an appreciating asset due to its strictly limited supply, leading many people to hold rather than use it as a currency. Bitcoin is even being referred to as digital gold or Gold 2.0.

Respondents were also asked what factors would influence them to invest in cryptocurrency. Gemini found that Aussies were looking for increased education on the topic, with 34 percent of respondents who don’t invest in crypto saying they would invest once they had more information and could understand cryptocurrencies as an investment. One third (32 percent) of those who don’t invest in crypto said they would when it is regulated.

Despite the exciting growth and developments within the crypto space, Mr Ng caveats that investors shouldn’t look at their crypto investments as get-rich-quick opportunities.

“The cryptocurrency space is still in its early stages and is therefore subject to much more volatility than the traditional asset classes like the stock market," Mr Ng said. As a result, it is possible for individuals to see short-term losses.

"I personally recommend doing thorough research to understand the fundamentals and use-cases of crypto assets prior to investing, take a long-term investment view and never invest more than you can afford to lose.”

The Gemini digital currency platform was launched by the Winklevoss twins, Cameron and Tyler, who are also billion dollar investors in Bitcoin. Its value has trebled since their investment. The Winklevoss twins are probably best known for winning a major settlement with Facebook founder Mark Zuckerberg over the technological origins of the social network.

 https://www.gemini.com/apac/australia

References:

 Respondents comprised 55% of people who invest in crypto and 45% who have invested in crypto.

Total Cryptocurrency Market Cap, 2021. coinmarketcap.com/charts/

 AusTrade, 2021 austrade.gov.au/benchmark-report/resilient-economy

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