Proposed carbon tax weighs on property sector

Uncertainty about a carbon tax, and messy state and federal government relations, are among the greatest problems facing the real estate sector, an industry forum has heard.

A lunchtime discussion with a panel of experts, hosted by the Property Council of Australia last week, canvassed wide-ranging issues for commercial property.

The panel included Brookfield Multiplex Australasia chief executive John Flecker, Jones Lang LaSalle regional director head of research David Rees and Cbus Property chief executive Adrian Pozzo.
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Dr Rees said the relationship between state and federal governments was a ”fundamental issue” for the property sector. He described relations between state and federal governments as ”incoherent”.

”If the matter was solved, I think a lot of the tax issues would be solved too,” he said.

He said a tax summit proposed by the federal government was a good idea but was unlikely to deliver substantial change.

The summit is to be held over two days in October.

”I just can’t see how in that limited period of time we can achieve very much,” Dr Rees said.

Asked about the impact of a carbon tax, Dr Rees said property was one of the sectors that had been overlooked.

Mr Flecker said confusion surrounded the introduction of the tax even though Prime Minister Julia Gillard began releasing details about its implementation earlier this month.

Mr Flecker said consumers could be forced to foot the bill of rising costs because of the carbon tax.

He said the mining resources tax was also adding to the confusion and pressure on the sector. ”All of those things are slightly unknown,” he said.

But Cbus Property CEO Adrian Pozzo said tenants already had high expectations that property development would feature environmentally friendly designs.

”Sustainability is a given,” he said.

Sharing the cost of green construction, however, was another matter.

”That will be the case with the carbon tax, it will cost us more but the tenant will only pay what the tenant wants to pay,” he said.