12:00a.m. 22nd May 2008

| By Blythe Seinor

The man behind Coast building giant PJ Burns is furious at the lack of affordable housing on the Sunshine Coast.

Rick Burns said the situation would only worsen when changes to the state government’s payroll tax system come into effect on July 1.

The change will cause the cost of building a new home to rise by more than $3000, according to an independent report by Queensland Master Builders.

Companies which pay more than $1 million a year in wages currently pay a payroll tax of 4.75%.

Under the new system, sub-contractors who do a majority of their work with one company will be considered employees, which would mean more companies would hit the $1 million mark.

Mr Burns, who has been building on the Coast for 30 years, said he would have no choice but to pass the fee on to his customers.

“That’s what worries me,” he said.

“How can a state government talk about housing affordability and then add in a bill of $3400 (per house)? It just doesn’t add up.”

However, Mr Burns said he did not expect to see a drop in the number of houses built on the Sunshine Coast.

“It’ll just put the price of houses up, and it’ll put the price of second-hand houses up too,” he said.

“The reason second-hand houses have gone through the roof is because new houses and land have been so dear.”

Mr Burns said while he would not be personally affected by the rise, he hated passing increases on to his customers.

He said more land should be released for development to make building a home more affordable.

Andrew and Jenny Harries, just weeks away from the completion of a four-bedroom home at Bellflower, were relieved to have missed the increase.

“That would have devastated us,” Mr Harries said.

“Most people building a new home have a set budget and it’s really important that the building company and the client stick to that budget.

“It’s another nail in the coffin as far as how far you can stretch your resources.”

Master Builders director of construction John Crittall said the building industry had already “cooled down” on the Coast, and the extra fee would make the situation worse.

Master Builders has asked for a 12-month moratorium on the legislation so that it would come into effect on July 1, 2009.

It has also requested a further amnesty to allow the industry time to implement changes to adapt to the “extremely complex” legislation.

Deputy opposition leader Fiona Simpson said the opposition had strongly opposed the legislation in parliament.

FEES AND CHARGES

Federal

GST and company tax adds about 50% to the taxes on a new home. In 2005 on a new house and land package in Maroochy Shire company tax was $14,703 and GST was $34,363.

State

Infrastructure Charges are about 5% to 6% of the total cost, with stamp duty, council rates, land tax, council fees, compliance and approval costs, holding costs from council added on. When you add stamp duty to the purchase price it amounts to another $7750.

Noosa council

Water, sewerage, public open space, coastal major road network, pathway trunk network, stormwater drainage fees and charges amount to $21,358.

Maroochy council

Water, sewerage, public parks, roads, bikeways and bicycle facilities, stormwater quality and land for community facilities fees and charges amount to $17,038.

Council fees are yet to be amalgamated, Caloundra figures were not available. Information provided by UDIA.