Low rents, taxes to attract new business to South Australia in wake of COVID-19

Cheap office rents, competitive business taxes and lifestyle benefits on offer to skilled workers are expected to entice more businesses to set up in South Australia as the state bounces back from the COVID-19 pandemic.

The state’s management of the health crisis has been lauded by business leaders, who expect it to enhance the state’s position as one of the cheapest places to do business in Australia.

The latest figures from international property group Colliers International reveal office rents in Adelaide are the lowest of the six biggest capital cities - less than half the rate paid by tenants in Sydney and around two thirds of the price paid in Melbourne, Brisbane and Perth.

Changes to payroll tax introduced by the State Government in 2018 have brought the state into line with the other states, while recent land tax cuts and the abolition of stamp duty on commercial property have made investing in property more attractive.

Property Council SA executive director Daniel Gannon said South Australia was the safest state in the safest country, and it was time to sell the other advantages of doing business in the state.

“Adelaide is fast becoming the nation’s comeback capital in the wake of COVID-19 and the success our state has experienced combatting this pandemic,” he said.

“South Australia is the beneficiary of many national competitive advantages like house price and commercial office rent.

“When this competitive advantage is combined with the state’s benchmark health response to the pandemic, South Australia’s competitiveness is nation-leading.

“We shouldn’t limit our tenant and business targets to one part of the economy or market. What we should do is spruik our economic, health and lifestyle advantages and encourage ASX-listed companies to send parts of their operations to office buildings in the Adelaide CBD.”

Sam wundke

Property Council of Australia SA executive director Daniel Gannon. Picture: AAP / Sam Wundke

The latest ABS figures reveal labour costs are also lower in South Australia than in most other states, with average weekly earnings 10 to 20 per cent less than in NSW, Victoria and WA.

SA Centre for Economic Studies executive director Michael O’Neil expects the state’s competitive labour costs to drive an expansion of service industries.

“With companies like Accenture and Hewlett Packard coming to South Australia due to lower rental costs and the supply of skilled labour, more service industry investment will continue,” he said.

“The absolute key for further investment in services is our lower wages costs and lower cost of living, as services are labour intensive and this is the future for employment.”

William Buck Adelaide managing director Jamie McKeough said the business tax environment in South Australia was “either back in line with other states or better”, and it was time to sell the competitive advantage.

“We need to promote these advantages to the decision makers interstate or overseas,” he said.

“We have a good story to tell and real life case studies, now we just need to make sure as a state we tell it well and to the right people.

“Our advantages make SA ideally suited to businesses that require a smart, skilled and significant workforce. When you combine the overall lower costs of living, world-class universities producing skilled, work-ready graduates and an enviable way of life, it’s the perfect environment to source a sizeable workforce for any number of operations, from highly specialised tech roles to global call centres.”

Low rents, taxes to attract new business to South Australia in wake of COVID-19 by Giuseppe Tauriello originally seen in The Advertiser, 4 November 2020. Licensed by Copyright Agency. You may only copy or communicate this work with a licence.