OECD report condemns Australias town planning laws and infrastructure charges

15 November 2010

An international organisation representing the governments of the worlds developed nations has slammed Australias system of town planning laws, according to the Urban Taskforce. The OECD Economic Surveys: Australia, Volume 2010/21 November 2010, Supplement 3 was made publicly available by the Organisation for Economic Co-operation and Development today.

 

The Urban Taskforces chief executive, Aaron Gadiel, said the report highlighted the serious medium term risk our economy faced as a result of restrictive planning laws and inefficient infrastructure charges on new homes.

 

This credible international organisation is giving us an early warning that Australias inadequate housing supply needs to be fixed, Mr Gadiel said.

 

Reform is crucial if we want to see non-inflationary growth and a sensible allocation of resources.

 

The OECD report says that a rising share of the population is being priced out of the [housing] market.

 

Measures should be adopted to stimulate supply and more efficient use of the existing housing stock, the OECD says.

 

The supply constraints need to be lifted by streamlining the planning and zoning regulations, the report says.

 

More transparent, harmonized and less restrictive zoning and planning regulations across jurisdictions are needed.

 

Rationalizing infrastructure charges with nationally consistent principles would encourage more efficient land use and reduce delays and cost of negotiation between developers and local governments.

 

Lower conveyance duties would reduce transaction costs and improve the use of the existing housing stock.

 

Subsidies to demand benefiting first-home buyers should be phased out, and redirected to raising supply.

 

Mr Gadiel said the report makes it clear that there is a need to pursue structural reforms to enhance the functioning of the housing market.

 

This report is a real wake-up call to complacent state and local governments, Mr Gadiel said.

 

It says Australias ability to increase housing supply in response to demand compares poorly with countries with a similar population density such as the United States, Canada, Sweden or Finland.

 

Its clear that the high costs of sweeping prohibitions and restrictions, together with inefficient infrastructure charges, have crippled Australias housing supply.

 

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

 

Please note: Direct quotes from OECD Economic Surveys: Australia are in the PDF available below.

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