“Senior sources” within the Abbott Government have reportedly thrown a wet blanket over the plan to charge foreign property buyers an application fee to purchase Australian property, for fears that it would inflame relations with China and stymie negotiations for a free trade agreement. From The AFR:
A backbench proposal to slug foreign property buyers with an application fee to fund a crackdown on illegal purchasing is unlikely to be taken up by the government, senior sources said…
Widespread community concern about the impact of foreign buyers in markets such as Sydney and Melbourne, where prices have surged, comes at a sensitive time for the Abbott government.
Negotiators are working to complete an historic foreign trade deal with China in time for the November Group of 20 leaders’ summit in Brisbane, due to be attended by Chinese premier Li Keqiang.
The plan to charge an application fee was flagged by Liberal MP, Kelly O’Dwyer, who revealed that the parliamentary inquiry into foreign property investment was actively considering fees in a bid to raise money to fund greater monitoring and compliance activities by the Foreign Investment Review Board (FIRB).
If the “senior sources” are correct, this represents a pathetic position from the Abbott Government. It is standard practice to cover the costs of regulation via levies and charges on users. Australian ADI’s and insurers are levied to cover the costs of APRA’s monitoring and enforcement activities, just as consumers are charged fees when obtaining a drivers licence, transferring ownership of assets, or the like.
Without providing FIRB with adequate means to bolster its monitoring and compliance activities, through the use of application fees, it has little chance of fulfilling its functions. But hey, maybe this is the whole point: the Abbott Government doesn’t want foreign buyers to be policed as it threatens Australia’s housing ponzi.
