Election campaign demands new policies to unblock our cities

19 July 2010

The Urban Taskforce has called on the major political parties to release election policies to reform land use laws, to make a serious investment in urban infrastructure and reduce development levies.

The Taskforce’s chief executive, Aaron Gadiel, said that a major program of microeconomic reform around land use laws was vital and must be led by the federal government.


“You know you have a real problem when the Reserve Bank is increasing interest rates partly because restrictive land use laws are choking off housing supply,” Mr Gadiel said.


“The complex system of prohibitions that prevents and delays vital urban development projects, is contributing to the sense of congestion in our cities and imposes huge economic and social costs on the whole community,” he said.


“In April, the Council of Australian Governments laid down a new road map to guide an urban development reform agenda.


“The next government needs to jump on this process and drive change across Australia, to lift the regulatory burden that is preventing housing and well-located commercial and retail development from getting off the ground.”


Mr Gadiel said that a newly elected federal government will need to step-up and accept responsibility for infrastructure costs vital to the development of new urban communities on the edge of Australia’s cities.


“Both sides of politics have questioned whether the infrastructure in western Sydney, western Melbourne or the Gold Coast growth corridor is good enough,” Mr Gadiel said.


“Yet Infrastructure Australia’s criteria now discriminates against new and emerging suburbs on the edges of the existing urban footprint.


“Public transport projects and roads that facilitate new outer suburban development are viewed unfavourably.


“Both sides of politics have elected to focus on Australia’s rate of population growth.


“It’s incumbent on them to come up with policies that genuinely tackle this issue.


“That means federal government acceptance of the obligation to fund our cities’ infrastructure requirements as the demand for housing, shopping precincts and new workplaces continues to grow.


“We’d like to see an annual rolling program of funding cities infrastructure, including expanded public transport, motorways and key arterial roads crucial to growth.


“This means more than boutique schemes tackling a small number of areas it has be a large-scale program targeting both capital cities and major regional growth centres.


“It’s crucial that infrastructure servicing new suburbs at the edge of cities be supported, as well as the infrastructure vital to creating compact, pedestrian friendly residential communities in the inner and middle ring suburbs of cities.”


Mr Gadiel said the Henry tax review vindicated developers’ concerns with infrastructure charges imposed on new development.


The Henry report said levies that were complex, non-transparent or set too high, discourage investment in housing, lower the overall supply of housing and raise its price.


The report also criticised planning rules that make development approval contingent on development charges of uncertain size, finding that the increased risk can affect project viability. The report exposed the fact that many so-called “infrastructure charges” were in fact merely thinly disguised betterment taxes.


“A new elected Federal Government will need to force state and local government to reform their system of levies,” Mr Gadiel said.


“Levies need to be much lower, better structured, more transparent and stable. Ideally, reforms to levies would be linked to a major program of federal investment in urban infrastructure.”


Mr Gadiel said the plight of home buyers and renters is emerging as a major federal political issue.


“We now have three federal ministers covering housing, infrastructure and sustainable population portfolios.


“There’s been an avalanche of reports, policy statements and niche programs to tackle housing and population issues.


“But even with all this activity, we’re still short on a comprehensive federal solution to the poor state of our housing supply and the declining infrastructure in our cities.


“The party that can develop a fully-costed plan for urban infrastructure investment, combined with a workable agenda to force change to state planning systems, will deserve to win government.


“Neither major political party makes the grade at this point.”


The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.



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