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UPDATED: HIGH build costs could be kerbed under reforms announced today by the Queensland Government to the state’s development infrastructure charges.
Taking a break from today’s Building Revival Forum, Urban Development Institute of Australia (UDIA) Queensland president Warren Harris told Gold Coast Business News the proposed changes would bring ‘certainty and confidence’ to the construction sector.
However he highlights Federal Government intervention is the ‘missing element’.
Under the proposed move, the maximum council charges for trunk infrastructure including water, sewerage, storm water and roads would be substantially lowered from July 1.
The current system means building a three-bedroom residential dwelling could incur up to $50,000 in infrastructure charges, but this could soon be capped to $28,000.
“We are realistic in understanding the councils have footed a large bill in delivering infrastructure to new housing constructions and should be able to recover some of those costs from the home owner,” says Harris.
“This morning’s announcement brings a measured control on how much they can charge for housing projects and this will create certainty and confidence, and create jobs in the building industry.
“But the missing element is Federal Government funding. This isn’t about councils and developers, it’s about councils recuperating infrastructure costs and the State and Federal Government’s should assist when necessary.
“Councils have agreed with the State Government proposals this morning, but where is the Federal Government?”
In announcing the capped charges this morning, Deputy Premier Paul Lucas says the state is not introducing a blanket charge, but rather is encouraging local councils to charge less than the new maximum.
“A central element of the reforms is giving local governments flexibility to choose whether they adopt the maximum charges or to charge lesser amounts,” says Lucas.
“This will give them the ability to choose lower infrastructure charges as a way of stimulating construction and competing for development.
“These reforms will provide greater certainty in the way councils calculate infrastructure charges, giving developers more confidence so we can continue to see development in Queensland which brings jobs and housing affordability.”
Housing industry body Master Builders is also participating in the Building Revival Forum and director of housing policy Paul Bidwell, says the priority is to agree on measures to significantly boost building activity.
“The recent Building Approvals and Housing Finance figures from the Australian Bureau of Statistics confirm the grim state of the industry,” says Bidwell.
“Master Builders Surveys of Industry Conditions indicate the top five constraints facing Queensland’s building and construction industry over the last 12 months are availability and cost of finance, levels of demand, planning approval processes, interest rates and local government infrastructure charges.
“The latest decision by the Reserve Bank of Australia to keep interest rates on hold will go some way to improving consumer confidence, however more specific strategies are required to boost the industry.
“One of the first steps we need to take is to reduce the cost of new house and land packages. This means smaller homes and cheaper land. A sensible decision must also be made on the capping of infrastructure charges.”
The State Government has also agreed to extend the current June 30, 2011 deadline for the adoption of Priority Infrastructure Plans (PIP) to December 31, 2011.
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