19 April 2010
Today’s NSW Government’s report on the impact of town planning laws on competition takes some steps in the right direction, but it also backs the status-quo in key areas, according to the Urban Taskforce.
The Taskforce’s chief executive, Aaron Gadiel, said that town planning laws have been reducing competition and consumer choice – leading to consumers paying up to 22 per cent more for basic food items and up to 39 per cent more for other household products.
“The report foreshadows an end to some of the most blatantly anti-competitive practices in the NSW planning system,” Mr Gadiel said.
“Rules expressly restricting the number of supermarkets, convenience stores and other retail outlets in an area will now be abolished.
“Rules that require retail outlets to be a minimum distance away from any competitor are also to be scrapped.
“The acknowledgment that it’s not the role of bureaucrats to second-guess the commercial judgments of business people is a positive step forward.
“These are welcome, long-overdue, reforms.
“We’ve played a key role in highlighting these rules, so we’re obviously pleased that they are to be abolished.”
However, Mr Gadiel said that the current anti-competitive rules which allow planning authorities to consider the impact of new businesses on the trade of existing businesses would be codified and preserved.
“On this issue, the paper merely proposes the codification of existing town planning requirements put in place by the High Court in 1979.
“These rules already prohibit planning authorities from considering the competitive impacts of businesses within an existing retail precinct, but they leave a giant loophole that has boosted the market power of the incumbent retail landlords.
“Planning authorities will still be free to force new supermarkets seeking to set up outside of an established shopping precinct to produce evidence that they will not steal trade from competitors located in the existing precinct.
‘While the codification may stop some abuses of the current system, this measure does not represent a wholesale reform.
“We’ll be pushing for more comprehensive changes as part of the pending Productivity Commission review of state planning systems.
“Retail developments should be encouraged outside existing congested shopping centres, easing the transport burden and encouraging more pedestrian friendly communities.
“Retail developments should be free to locate where the customers are rather than forcing customers to travel further by car for shopping needs.”
In 2008, the Urban Taskforce released Choice Free Zone, a report by former ACCC Chairman, Professor Allan Fels, to examine some of the regulation of retail development in NSW. His report concluded that shoppers are paying far too much for their groceries because of restrictive out-of-date planning laws.
Mr Gadiel also welcomed the decision by the government to formally require councils to take a more flexible approach in applying their development control plans.
“Local councils have always had an obligation to apply development standards in state government approved local environmental plans flexibly,” Mr Gadiel said.
“But, in recent years, many haven’t been taking the same approach to their own development control plans.
“This has led to a blind adherence to rules, even when a situation cried out for a more common sense approach.
“The decision by the government to instruct councils to take a flexible approach to development control plans, in-line with their approach to local environmental plans, is welcome.
“Although, further reform is required to ensure that council development controls plans do not prevent developments expressly envisaged by state and regional planning policies.
“There is too much duplication and overlap between federal, state and local council requirements.
“For example, apartment development is subject to the building code, a high prescriptive state government design code and then further provisions in local council development control plans.
“The scope of matters that can be dealt with by development controls plans should be limited, and developments that meet the standards already set by the state government should be entitled to approval, even if they don’t satisfy prescriptive provisions in a council policy.”
The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.
The construction activity made possible by property developers contributes $78 billion to the national economy each year and creates 849,000 direct jobs
