Brisbane wants to pride itself on sustainable development practices as the pursuit of ‘green living’ gains popularity, but any chance of turning this theory into reality is being held back by a number of barriers restricting the property industry. Facing a system weighed down by bureaucracy, Property Council of Australia (PCA) Queensland executive director Steve Greenwood tells Brisbane Business News that the Queensland Government needs to make urgent reforms if it is to accommodate the state’s growing population.
AT the State of the Capital Conference I asked the room two questions: ‘Hands up those who have submitted a development proposal in the last five years?’ and ‘who here found it to be a simple, efficient and timely process?’
The response to the second question was unfortunately exactly as I thought it would be – very poor. But when you look at the realities facing southeast Queensland with population growth rising and an undersupply of buildings to accommodate that growth, this is a very concerning issue. We’re facing a seriously difficult situation and while the Lord Mayor is proactively driving changes within the Brisbane City Council’s sphere of influence, action needs to be taken at State Government level.
Property development is a high economic multiplier, which is being undermined by the excessive taxes being levied upon it. The original 2005 South East Queensland Regional Plan (SEQRP) aims to accommodate one million extra people in the region by 2026, which would be the equivalent of 2000 high-rise towers.
That translates to more than 100, 20-storey towers that need to be built each year for the next 20 years – big numbers for a big challenge.
To achieve anything close to those estimates would require a multi-faceted approach to reform in the property industry.
I’ll start with property taxes and the land valuation system – in the 1999 Intergovernmental Agreement all states and territories committed to the abolition of stamp duties, but despite significant growth in GST revenues, the tax is still in place and accounted for $3.2 billion in Queensland last year.
We would see a lot more construction going on if the government delivered on its stamp duty abolition promise by no later than 2013, along with the phasing out of land tax and replacing the State Evaluation Service with a truly independent valuation entity.
Secondly, the government needs to act quickly to address the hold-ups in delivering on the growth targets in the SEQRP, which we believe is currently not going to provide sufficient land for housing, industrial, commercial, and retail activities needed for the region’s growth.
To do this would require greater infill development in existing suburbs, but we need address the resistance by the broader community to high density living and start marketing its benefits – if people live and work in closer proximity it means lower transport times, less infrastructure demand and more affordable accommodation, which will benefit the economy and the environment. If we want to think ‘green’ we have to act ‘green’.
We need a more efficient process here and legislation changes that limit the time taken for planning scheme amendments to be no more than 12 months would be a good start.
Thirdly, after surveying our members, we found that development assessment applications are taking around 25 per cent longer than they did a decade ago and I believe this is because under the current system there is a lack of incentive for government bodies to meet statutory timeframes.
Simple approvals are taking inordinate amounts of time to process and average holding costs are escalating as approval timeframes stretch out. These costs are impacting on housing affordability and commercial development costs.
The Brisbane City Council’s RiskSmart system of third party clarification of development proposals is a good one and should be further expanded. The solution could also be to amend the Planning Act so that delayed applications are automatically approved when government agencies fail to meet IDAS timeframes, or while I hesitate to suggest it due to the immensity of the task, perhaps the amendment system needs to be redesigned entirely.
Fourthly, boosting infrastructure is needed and this would be most efficiently done through an increased use of public debt. There is also value in closely examining the use of tax increment financing for the funding of infrastructure delivery and a new approach is needed to public private partnerships (PPP’s).
This solution would need to encourage greater private sector involvement - more than is currently the case, and reduce the hurdles of participation in the tendering process for state infrastructure projects.
The election of a new government lead by Anna Bligh offers a great opportunity to address these issues. The new cabinet is a younger, fresher team and together they offer the potential to drive some significant reforms that genuinely address the issues holding back Brisbane. I am hopeful they will deliver the major reforms needed and by doing so keep Brisbane and Queensland moving forward.
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