Union calls for super profits tax to end housing crisis
The call comes ahead of today’s campaign launch at the National Press Club in Canberra
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The Federal Government should introduce a super profits tax to solve Australia’s housing crisis, one of the country’s largest unions has said.
The CFMEU, the main union for construction workers in Australia, commissioned research from Oxford Economics Australia to investigate the viability of using a super profits tax to address the nation’s social and affordable housing shortfall. The report found Australia needed 750,700 new dwellings to close the housing gap by 2041, which could comfortably costed by taxing excess earnings of corporate giants in Australia.
National secretary of the CFMEU, Zac Smith, will launch a campaign at the National Press Club in Canberra today, called End the Housing Crisis, Tax Super Profits and has called on the Albanese Government to commit to the new tax.
“The enormous scale of Australia’s housing crisis demands bold solutions,” Mr Smith said. “A super profits tax is the fairest way to raise the billions of dollars needed to guarantee every Australian has the basic right of shelter. Oxford Economics Australia has found we can close the yawning housing gap without discouraging investment or creating distortions in the market.”
He said such a tax would not affect 99.7 percent of businesses “because the tax only kicks in when corporations make astronomical profits”.
“The Federal Government has the opportunity to define its legacy as ending homelessness, boosting productivity and lifting millions out of poverty,” he said.
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A legacy “partner” lease structure tied to sales, not fixed rent, is drawing investor attention as a potential hedge against inflation.
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A McDonald’s restaurant in Yass has been brought to market with one of the last remaining pure turnover leases in Australia, offering investors a direct share of revenue rather than a traditional fixed rental return.
The asset, located at 1713 Yass Valley Way, is being marketed by JLL via an expressions of interest campaign closing on 30 April. It is underpinned by a legacy lease structure no longer offered by McDonald’s in Australia.
Under the arrangement, the landlord receives 6.5 cents for every dollar spent at the restaurant, creating uncapped income growth linked directly to sales performance.
The lease is structured as triple net, meaning no operational risk, capital expenditure obligations or management responsibilities for the owner.
According to JLL, the property has recorded compounded annual sales growth of 4.26 per cent since 2003, with rental income rising by 150 per cent over the same period.
JLL’s David Mahood said the structure allows investors to “participate directly in the sales growth” of the business, rather than relying on fixed annual rent reviews.
The newly commenced lease runs to 2036, with four additional 10-year options extending to 2076, providing a weighted average lease expiry of 9.92 years by income.
The asset sits on a 3,571 square metre freehold site in Yass, with significant frontage to the Hume Highway, one of Australia’s busiest freight corridors.
The location benefits from high volumes of passing traffic, including an estimated 75,000 vehicles per day.
The quick service restaurant sector has remained resilient through economic cycles, including the pandemic and recent cost-of-living pressures, with McDonald’s continuing to expand its footprint and invest in store upgrades across Australia.
JLL pointed to strong investor demand for McDonald’s-backed assets, with recent transactions typically yielding between the high 2 per cent to mid 3 per cent range.
The Yass listing is expected to attract interest due to the scarcity of turnover-based leases, which provide a natural hedge against inflation by linking income growth to consumer spending rather than predetermined increases.
McDonald’s Yass is available for sale via an Expressions of Interest campaign closing at 3:00pm (AEST) on Thursday, April 30.
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