Productivity Commission delivers a reform road map

31 May 2011

The Productivity Commission has today handed the federal and state governments a road map for the reform of the nations tired town planning laws, according to the Urban Taskforce.


The Performance Benchmarking of Australian Business Regulation: Planning, Zoning and Development Assessments was released following a year-long review. The report will be discussed at the Council of Australian Governments.


The Urban Taskforces chief executive, Aaron Gadiel, said there was now an opportunity to undertake the fundamental reform required to fix Australias massive housing supply crisis once-and-for-all.


This is a once a generation chance to undertake far-reaching microeconomic reform, on the same scale as the Hawke/Keating governments reform of outdated industrial relations laws, Mr Gadiel said.


Mr Gadiel said that Australias housing shortfall is at 200,000 homes, with a projection for it to grow to 308,000 by 2014.


Just 28 per cent of homes sold Australia-wide are affordable to moderate-income households, he said.


Melbourne, with its robust housing supply, has the highest proportion of homes affordable to moderate-income households at 39 per cent – while in Sydney only 26 per cent of homes sold were affordable to moderate-income households.


Mr Gadiel said the Productivity Commissions report identifies seven leading practices which could, if adopted across the nation, dramatically improve the efficiency and responsiveness of the state planning systems:


1. Early resolution of land use and coordination issues.

2. Engaging the community early and in proportion to likely impacts.

3. Broad and simplified development control instruments.

4. Rational and transparent allocation rules for infrastructure costs.

5. Improving development assessment and rezoning criteria and processes, namely:


¢ linking development assessment requirements to their objectives;

¢ eliminating impacts on the viability of existing businesses as a consideration for development and rezoning approval;

¢ using a risk-based approach;

¢ facilitating the timely completion of referrals;

¢ adopting practices to facilitate the timely assessment of applications;

¢ adopting practices to facilitate access to relevant information; and

¢ providing transparent and independent alternative assessment mechanisms.


6. Disciplines on timeframes.

7. Transparency and accountability.


This is a wide-ranging report that tackles almost everything that is wrong with Australian town planning laws, Mr Gadiel said.


Its the most intimate examination town planning laws have ever been given by someone independent of the system.


The Productivity Commission should be congratulated for its rigour, and avoiding the superficiality others reviews.


While we dont agree with everything in this document, it is undoubtedly an excellent road map for any political leader committed to the reform of land use planning.


Mr Gadiel said he was particularly pleased that the Commission recognised the need for alternative assessment mechanisms where proposals that have positive or negative impacts beyond a councils boundaries can be assessed by a higher level of government.


Its become increasingly clear that the modern age of NIMBYism is encouraging local councils to stop large developments – even when theyre clearly beneficial to a whole city or region, he said.


Mr Gadiel said the reform of the development control regime, with its complex and arcane system of prohibitions and prescriptive rules, was also a very welcome proposal.


The command and control mentality is embedded in the current planning rules, with neither businesses nor home buyers given the opportunity to decide the kinds of buildings they want to have.


Mr Gadiel said the Productivity Commission has also tackled the anti-competitive provisions in the planning system which see new businesses denied approvals because of the impact they would have on incumbents.


This issue has now been identified as a problem by three independent reviews, and one Federal Government policy statement, but we are yet to see any substantial action on the ground.


Hopefully this report will now finally provide the necessary impetus.


Mr Gadiel said the budget papers last week included an announcement that the Prime Minister would begin rigorous COAG process to lead the development of Commonwealth-State reforms.


We hope this Productivity Commission report will be the first item of business in the Prime Ministers discussions with COAG, he said.


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


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