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Theres nothing wrong with debt if it helps grow the NSW economy

29 December 2008

The development industry today welcomed the Oppositions commitment to proceed with major new urban infrastructure on the back of a larger budget deficit.

The Urban Taskforces chief executive, Aaron Gadiel, said that there is nothing wrong with debt if it helps grow the NSW economy.

 

Its a false economy to balance the books by underspending on urban infrastructure, Mr Gadiel said.

 

The Bureau of Transport and Resource Economics has found that the avoidable costs of Sydneys congestion were $3.5 billion in 2005.

 

Without new infrastructure, the Bureau says these costs will more than double by 2020 – to $7.8 billion.

 

These costs are greatest in Sydney – where they are 17 per cent higher than Melbourne, three times higher than Brisbane and four times the costs in Perth.

 

Underspending on infrastructure will just cause more pain for the states finances down the track.

 

Mr Gadiel also welcomed comments by Opposition Leader, Barry OFarrell, backing new policies that would foster competition and choice.

 

Sydneys big challenge is to overcome the entrenched barriers that have been preventing home-buyers and renters from having a genuine choice of housing type, he said.

 

We hope this is a sign that the Opposition will reform the planning system to promote greater competition amongst land-owners and developers.

 

This requires more flexible land release policies on edges of established urban areas and greater opportunities for home buyers and renters to access compact, pedestrian friendly living opportunities in the inner suburbs.

 

The Opposition should also look at reforming planning laws stopping new businesses from competing with established shopping centres.

 

In August the Australian Competition and Consumer Commission found that competition in grocery retailing was being limited by town planning laws. It concluded that zoning and planning regimes act as an artificial barrier to new supermarkets.

 

In the same month the Productivity Commission found that small retail tenants face an uphill battle in negotiating with oligopolistic shopping centre landlords.

 

NSW planning laws clearly need to be reformed to boost opportunities for competition, Mr Gadiel said.

 

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

 

 

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