Fresh speculation about a GST rise emerged over
the weekend and senior government ministers have not
ruled out the change.
In the 12 months prior to the GST's introduction,
dwelling commencements increased by 15 per cent to
172,000 before falling to a record low of 115,000 the
next year. In financial year 2002, commencements
rebounded to 165,000.
Despite the volatility, the dwelling commencement
average over the three years from financial year 2000 to
financial year 2002 was 150,000, which was in line with
the long-term average.
"This implies that the absolute number of new
homes built did not change over that three-year period
but the timing of the activity was severely distorted,"
the note said.
Nevertheless, the result was a "double whammy
shock", it said.
"While building product volumes significantly fell
post the introduction of GST, the impact to company
earnings was exacerbated by a lack of price growth as
the market, including home builders, adjusted to the new
environment."
For example, over the three-year period Boral's
building product divisional revenue fell 33 per cent,
while earnings before interest and tax (EBIT) was down
by 47 per cent.
For CSR, building product divisional revenue fell
15 per cent with EBIT down 30 per cent.
Source:::
The Australian Financial Review, dated
02/11/2015.........