GROWTH CENTRES (DEVELOPMENT CORPORATIONS) AMENDMENT BILL 2008
Agreement in Principle
Debate resumed from 2 April 2008.
Mr BRAD HAZZARD
(Wakehurst) [5.17 p.m.]: The Opposition will not oppose the Growth Centres (Development Corporations) Amendment Bill 2008 because we see the need to move forward as quickly as possible in terms of getting property into the market in New South Wales. The development of new land is critical to the financial position of New South Wales. It is critical to ensure that New South Wales moves from the bottom of the pile back to the top of the pile. When the State Coalition left office in 1995 all economic indicators showed that the State was progressing extremely well. Thirteen years later we have a government that has brought the State to its knees. We need to ensure that there is an appropriate land resource that is capable of being brought to the market expeditiously and appropriately.
The Growth Centres (Development Corporations) Amendment Bill will amend the structure for growth centres. Two of the main growth centres are in the north-west and south-west sectors of Sydney. This bill purports to offer an opportunity to change the structure of the management of the board and to bring the various executives into a management structure from the various government departments that currently are needed to facilitate bringing land to the market. The Opposition has had discussions with the Minister for Planning about this legislation and whilst it has some reservations, on the basis of the information that the Government has made available to it—
Mr Frank Sartor:
He is such a fantastic Minister we will go along with it.
Mr Andrew Constance:
No, we didn't say that.
ASSISTANT-SPEAKER (Ms Alison Megarrity):
Order! The member for Wakehurst does not need the assistance of other members.
Mr BRAD HAZZARD:
I am in a state of shock. On the basis of discussions with the Minister, the Government and chief executive officer Angus Dawson, who is present in the gallery, about what is sought, the Opposition is sufficiently satisfied to not oppose the bill. As I understand it, the intent is to provide an opportunity to have senior executives from, for example, Sydney Water, the Roads and Traffic Authority and other major departments that are normally required to be part of the consensual process to bring land to the market. That is the easy part of the Growth Centres (Development Corporations) Amendment Bill but it is what is missing from it that is of concern to the Opposition. In New South Wales this Government is utterly incapable of ensuring that land reaches the market. In the north-west and south-west sectors, at this stage not one extra block of land has been brought to the market as a result of anything that this Government has done—
Mr Ray Williams:
Mr BRAD HAZZARD:
In reverse. Two or three years ago in the south-west of Sydney I met various local government officials. I remember they told me that one of the big problems in bringing land to the market in New South Wales was the obstructionist activity of the State Government's own agencies. I was then told—and this may have been addressed to some degree—that the de facto consent authority for land approval was really Sydney Water. That highlights that State agencies are often the cause of the obstruction of the forward movement of bringing land to the market. Maybe that might to some degree be assisted, as I am assured by the Minister and the chief executive officer of the growth centres it will be, but at this stage within each of those government departments no effort has been made by the relevant Ministers—I am not necessarily reflecting on the current Minister for Planning but more on all of his incompetent colleagues. They did not have the get-up-and-go to get up and go and to ensure that property can be facilitated to the market as expeditiously as is necessary.
That will be seen in a few weeks time when the revision of the Environmental Planning and Assessment Act, the planning legislation, comes to the House. We will then see that the Government has made no effort to break down the silos and accelerate the approvals process between government departments that exist within this Labor Government. The second major factor is that this bill has failed to address the big issue of the amount of government charges imposed on land in New South Wales. Time and time again developers who are trying to bring land to the market have told the Opposition that the current fee structure within New South Wales is a negative. The Opposition has been told that even with the Growth Centres (Development Corporations) Amendment Bill and with the structure of growth centres—north-west and south-west sector particularly—land will still not come to the market, particularly in the current economic climate, because it is simply financially unviable.
In a recent visit to south-west Sydney I observed that existing houses on land can be purchased for approximately $230,000 in some areas. I was told by developers that by the time the State infrastructure contribution and section 94 levies are imposed, development becomes unviable as property costs would be about $270,000. Simple market pressures mean that the cost of production exceeds the cost of sale, so development is not happening and will not happen. As long as the section 94 levies and the State infrastructure contributions remain the same, land will not be brought to the market in the growth sectors of Sydney.
That has been said by the Opposition and the Housing Industry Association on a number of occasions. In May 2007 the association observed a critical shortage of available land in New South Wales and referred to the cost of bringing that land to market. Companies such as A. V. Jennings reported to its shareholders in approximately May 2007 that it intended to do more work "in less aggressively taxed States" such as "Victoria and Queensland". Jennings asserted that its sales performance in all States had been satisfactory except in New South Wales where there is a major issue due to "State and local government charges" on greenfield residential developments.
The New South Wales Property Council, which very capably represents the interests of the property industry, has highlighted the enormity of State Government taxes and charges on new house and land packages. The council gave an example in Sydney's south-west of a house that costs $544,115 attracting State taxes of $44,993. In Sydney's north-west, on a property brought to the market at $570,240, State taxes amounted to $80,031. In other words, in the north-west of Sydney approximately one-sixth of the total cost of bringing a property to market is tax imposed by the New South Wales Government. That compares very poorly with interstate house and land packages. On the Gold Coast a property worth $391,775, a typical property cost in that market, attracted State taxes of $15,876, far less proportionately than in New South Wales. In Melbourne, a typical $366,660 total house and land package brought to the market has State taxes of $22,702.
New South Wales has a problem that has been created by this Labor Government's hunger for property taxes right across the board. Every major group that represents the property industry, an important industry in New South Wales, has been critical of the Government in this regard. In a media release in July 2007 the New South Wales Urban Task Force said, "At the moment almost no lots for new homes are being released because of State Government infrastructure charges." That is a simple statement of the simple truth. The problem compounds enormously on the State economy. On 24 September 2007, BIS Shrapnel showed in a report that the number of lots available dropped from 3,100 in 2004-05 to 2,800 in 2005-06.
The same report observed also that the average price of land in Sydney grew by 116 per cent between 2000-01 and 2004-05. What has been the Government's response to that critical economic issue? Yes, we have the Growth Centres (Development Corporations) Amendment Bill 2008, which offers a few people an opportunity for a management regime. Instead of having a distant group of board members, perhaps we will have more relevant State Government officials. Other than that, the only other response is a total jumble. In October 2007, with a bit of focus on political spin, the Government announced that there would be a reduction in government infrastructure charges on homes in growth centres from $33,000 to $23,000.
It was mentioned that there would be a similar reduction of local government charges in growth centres, from $45,000 to $30,000. For the section 94 levies, the local government charges, the Government was really talking about a nefarious average of figures, because currently there are no guidelines in place for the quantum of section 94 levies or, indeed, how they will be applied. At that time almost everyone was upset about this issue. The Government implied that there would be an overall reduction by about 10 per cent in government and council charges, but gave no real clarification of how that would work.
Quite possibly the announcements were based on a false assumption that the reductions would flow through to the sale price. I cannot see how that would happen. If a developer or anyone who owned a property could achieve the same sale price in an appropriate market, why would they reduce the price simply because government and council charges were reduced? There is absolutely no logic in what the State Government did, except that it provided a day's opportunity for media spin, media hype—which is what we saw. We saw also some interesting, fast, hot-shoe shuffling when on that day the Minister for Planning and the Premier released information that on the face of it looked as if the Government was for the first time about to impose new charges; that is, State infrastructure contributions on brownfield sites as well as greenfield sites.
The spin doctors worked overtime downstairs trying to convince the media that that was not what the Government meant. At the same time, Treasury officials were briefing the property industry. Treasury documents made it very clear that the State Government's intent was to potentially expand State infrastructure contribution levies to all sites in New South Wales; that is, existing areas of development that were to be redeveloped. The Government still does not seem to know the way forward. What it does know is how to spin for a day or a night's media—and I thought that that was it! In New South Wales there has been no serious discussion or negotiation with local government about the impact of a reduction of section 94 levies. The Government has failed to consider the impact on local councils. Indeed, Labor luminaries such as Leo Kelly, the Mayor of Blacktown City Council, has been very critical of the Iemma Labor Government in its approach to a large number of planning issues, particularly section 94 levies.
On behalf of the Opposition, I state that there is no question that section 94 levies are needed by local government. Equally, there is no question that we need to ensure that State government guidelines are in place for what is appropriate to be raised through section 94 levies, what total amounts should be raised and what they should be used for. There is no question that the areas in which the levies can be expended should be clearly stated and there should be equity between local government areas. There should be some continuity so that we do not have the situation that occurs in central Sydney, where section 94 levies on a home unit might be $3,000 and just a few kilometres away in the former South Sydney Council area they could be $23,000 or $30,000. Clearly that is inequitable, it is wrong and it needs to be fixed.
I am hopeful that when the planning bill finally comes to the House that the Government will finally put in place the necessary guidelines for that situation. Having said that, at this point it is critical that I acknowledge on behalf of the Opposition that the Government has utterly failed to discuss this issue with local government. Under the Iemma Government there have been more and more impositions on local government and they have not been met with appropriate funding arrangements. Local government has been squeezed; it has been treated as a cousin one hopes will not visit. Local government has been treated as someone who one does not need to have a discussion with to work out what is in the interests of local government or the community. On behalf of the Opposition, I implore the Government to open the door to local government and to discuss section 94 levies. It should ensure that appropriate guidelines will be introduced in partnership with local government, not as an imposition.
That raises another issue: In October 2007 the Government announced that there was to be an across-the-board reduction in State infrastructure contributions and section 94 levies. There was a clear indication that all section 94 levies would be taken off local government to be managed through Treasury. That was a straight-out grab for cash by the Government. Fortunately, the Opposition, members of the community and members of the Local Government Association of New South Wales spoke out strongly on this issue. Ultimately, the Government was forced to reconsider the issue. We now have a revised plan under which the State Government will manage, if you like, section 94 contributions from the six councils in the growth centre areas of the north-west and south-west of Sydney.
On behalf of those councils I advise the House that at this point the councils are entirely dissatisfied, because the State Government has not negotiated with them on how the changes will work. That is an entirely unreasonable way to approach what should be a partnership of local government, as I said previously. I again encourage the Minister for Planning and the Premier to recognise the value of local government and to recognise that any changes that are brought about should be reflective of the needs of local government to bring about positive outcomes for the community.
I return to the growth centres issues, and what land has been brought to market. The Opposition is hopeful and earnestly believes that it is necessary for the New South Wales economy and the families who want to buy land that the Government should approach the need to bring properties viably to the market in a most earnest fashion. I acknowledge the work of the Urban Development Institute of Australia, the Property Council of Australia, the Urban Taskforce of New South Wales, the Planning Institute of Australia, the architects and all those who have tried to provide input and advice to the Government about the best way to facilitate bringing property to the market. No-one should for one moment misunderstand the Opposition's views on the property industry or the development industry. Quite simply, the community needs property development in New South Wales. We do!
We need to know though, in the bringing of property to the market, that there is an appropriate statutory and regulatory framework. We need a framework that guarantees transparency and does not allow the sort of situation as occurred in Wollongong to occur in other parts of New South Wales. The Opposition supports the property industry's efforts to bring property to the market and understands its frustration in dealing with the current Government, particularly on State infrastructure contributions and issues surrounding section 94 levies. It is about getting the balance right. I hope that this bill will address just one very small aspect of that equation. Whilst I could say a lot more about the issues that arose in Wollongong and make appropriate observations about the Government, I will let the bill pass without too much observation on those issues.
Mr Geoff Corrigan:
Thank you. You can leave it up to Ray!
Mr BRAD HAZZARD:
I am not necessarily leaving that up to Mr Ray Williams, the member for Hawkesbury. We can do our duets on radio when we wish to highlight these issues. I am sure that on this occasion we will be satisfied with simply formally raising the shortcomings of this legislation and expressing hope that the Government will address those important issues. It is important that agencies, such as the Growth Centres Commission involved in the north-west and south-west sectors, engage the Opposition and speak freely and openly with us about this issue. After all, it is an important issue that should be a bipartisan issue for the Opposition and the Government. As I mentioned earlier, Angus Dawson, the chief executive officer of the Growth Centres Commission, is in the Speaker's Gallery. On behalf of both sides of politics I acknowledge the good work done by Angus Dawson, trying in a difficult regulatory framework to bring properties to the market. I look forward to the planning bill coming to the House and to greater opportunities to discuss more of the things out of Wollongong.
Pursuant to sessional orders business interrupted and set down as an order of the day for a future day