Lunch with James Merlino
Today, Deputy Premier and Minister for Education James Merlino joined committee members to share his thoughts on Victoria as the 'Education State'. Quite rightly, Minister Merlino pointed out that our outcomes in education have stalled over the last 15 years. Although we may have stalled at a reasonably high level, we must be concerned about the growing gap between our best and our worst, and also accept that while our highest levels have remained high, we have less people overall achieving at that level than we have had in the past. Not surprisingly, there is a strong focus on STEM educational aspirations, but that cannot be the only measure by which we define success. Knowledge and skills are very important pillars on which we should base a measure of success, but equally as important is a focus on developing key attributes and dispositions – which is often overlooked. We need to set a vision that takes us from pockets of individual brilliance, to universal excellence in every school. To raise the standard overall, we need to encourage autonomy while at the same time develop a stronger willingness to share models of success.
Major events are worth fighting for
Major events make a significant contribution to the Victorian economy and Daniel Andrews' pledge to boost major events is welcome news. Regardless of whether they come in the form of major sporting events, such as the Australian Open Tennis Championship, the Grand Prix or last night’s record breaking State of Origin clash, major arts and cultural offerings, like opera’s internationally renowned Ring Cycle, or major conferences; these events bring large numbers or interstate and international visitors to Melbourne. These visitors boost the economy by filling our hotels, restaurants, bars and shopping strips, which creates jobs for local residents. For major international events like the tennis and Grand Prix, the exposure Melbourne receives via massive worldwide broadcast also plays a huge role in placing our city on the global map. These events are more than just opportunities for us as Melburnians to enjoy great sport and culture, they are drivers of both our local economy and global brand. As such, we are right to ensure that Victoria is relentless in pursuing big events.
East West loan renegotiation boosts Metro funding
On Monday, Treasurer Tim Pallas announced a $3.1 billion dollar loan to part finance the Melbourne Metro rail project. The $3.1 billion is a result of protracted discussions with East West Link financiers to transfer the loan facility for the road project to the Metro rail project. Still well short of the $9 to $11 billion price tag required for Melbourne Metro, the question remains as to where the remaining dollars will come from. The Victorian Government still holds out hope the $3 billion of federal cash earmarked for the East West Link will be reallocated to the Metro project, but even in the seemingly unlikely event this comes to fruition, that still leaves us well short of the final mark. Tim Pallas also raised the idea of considering 'value capture' mechanisms to inject additional funds. The Committee has strongly advocated for value capture since releasing Moving Melbourne – A discussion paper on infrastructure funding and financing in 2012, and while significant steps have been made in better understanding how these mechanisms can work and growing acceptance for their use, there is still much work needed to be done in actually implementing some of these options.
Abolish stamp duty – and replace it with?
Stamp duty has become the latest focal point in a series of calls to change the taxation system. Initially introduced to cover the costs to government of transferring title, the tax has now become one of the major revenue streams for most state governments. According to a report by the Property Council of Australia, in 1995, the median house price in Sydney was $177,000 on which a purchaser paid $4685 in duty. Today, the median is $880,000 and stamp duty has risen to $35,090, around a 750 per cent increase – close to the 795 per cent increase seen in Melbourne. While the increasing price of housing plays a key role in these increases, one of the major contributors to the significant growth in stamp duty revenue is bracket creep. Addressing bracket creep is considered to be relatively simple in comparison to abolishing stamp duty entirely, and is something worth further investigation as part of the whole process of reviewing stamp duty. The real issue however lies not so much in agreeing to cut or indeed abolish stamp duty, but rather how to replace the large volumes of revenue this tax generates.
Student housing: next big investment opportunity?
Global investors looking to expand their portfolios have their eyes set on student accommodation as a major opportunity. In the Committee’s soon-to-be released paper on the international student sector, access to affordable and suitable accommodation options is identified as one of the biggest concerns facing Melbourne’s students. UK-based investor Scape Student Living’s recent purchase (with the backing of Dutch Pension company APG) of two prime sites in Melbourne and Brisbane for $560 million worth of student housing, clearly shows developers and investors see an opportunity to fill what they feel is a significant gap. As banks loosen up their view on suitable lending options to now include everything from student accommodation to aged care, and governments look to introduce investment incentives, such as the 80 per cent discount on infrastructure charges for student accommodation developments Brisbane City Council introduced this year, investment is being spurred. The danger is that in the rush to invest, the wrong sorts of accommodation will be developed. We must guard against the creation of accommodation that lacks the amenity, connectivity or affordability students require.