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‘Ridiculous regulation’: Labor makes housing central to economic summit
By Paul Sakkal and Shane Wright
Housing Minister Clare O’Neil will attempt to clear a backlog of tens of thousands of homes awaiting building approval by using next week’s economic roundtable to turbocharge construction.
As new data reveals homeownership is becoming a more distant dream for many prospective buyers, slashing red tape in the construction sector is firming as one of the few areas in which policy could immediately follow the summit as the government shuns more contentious ideas around tax reform.
Prime Minister Anthony Albanese with Housing Clare O’Neil and MP for Jagajaga Kate Thwaites in Melbourne on Tuesday.Credit: AAPIMAGE
O’Neil and Environment Minister Murray Watt will on Thursday give the green light to a $1.7 billion makeover of the historic Queen Victoria Market near Melbourne’s CBD, a development which will include a 49-level tower for student accommodation, a 46-level residential block, a 28-level office building, a park and car park.
Developer Lendlease was selected by the City of Melbourne to overhaul the site in 2023, but has been waiting for approval to proceed with its plans for the heritage market. O’Neil, citing a Property Council of Australia document, said about 40,000 homes were bound up in green tape.
“There are 40,000 homes somewhere stuck in that process, and that is way too many,” O’Neil said.
“I spoke to a builder yesterday who said to me ‘Clare, the really hard part about housing used to be building the house. Now it’s about approvals and bureaucracy’.
“I’ve had a really good look at what they are confronting and I’m absolutely convinced they are facing a thicket of ridiculous regulation.
“I am hopeful that we’re going to get some really meaningful reform on housing productivity out of the roundtable.”
As part of its work before the three-day roundtable beginning on August 19, which the government hopes will generate new economic ideas, ministers are considering cutting duplicate state and federal housing approval processes, lowering standards for developments similar to others that have already been accepted and tinkering with environmental laws.
Former environment minister Tanya Plibersek tried to revamp the laws, called the Environment Protection and Biodiversity Conservation Act, during the last term of government, but mining firms and the Western Australia state government baulked at proposed powers to be given to an environmental regulator.
Watt is attempting to reform the legislation, weighing the interests of mining companies, construction firms and renewables outfits against environmental groups who say the laws are key to protecting biodiversity.
Economists and industry groups have identified Australia’s broken housing market as a major productivity problem. Labor has shunned contentious tax changes on negative gearing and capital gains concessions that it took to the 2019 election.
Treasurer Jim Chalmers said on Wednesday that unlike in areas such as tax, consensus was forming around housing ahead of the roundtable. O’Neil said many Australians were not living near their workplaces and transport hubs because a lack of homes had distorted the market, making housing central to the productivity summit.
Meanwhile, a piece of red tape that superannuation funds argue has stopped investment in the property sector was put on the chopping block on Wednesday.
The Australian Securities and Investments Commission announced it would review regulatory guide 97, a long-standing requirement for super funds to report their fees, including transaction and investment costs.
The regulation seeks to ensure super fund members know how much of their savings are spent on fees and charges – a key metric to compare the relative performance of funds.
But the super sector has long argued that a one-off stamp duty charge on purchasing a building or land is very different to ongoing management costs, and that the regulation penalises funds that sink money into property.
Property Council chief executive Mike Zorbas said changing the regulation did not cost the government anything but could release up to $10 billion in housing investment.
But the Coalition attacked the move, with opposition housing spokesman Andrew Bragg saying “the Australian people want to live in their own home, not a home owned by big super”.
Research to be released by KPMG on Thursday will reveal that the nation’s housing shortages are biting into middle-class families more than ever.
In 2018-19, two-thirds of dwellings for sale were in the $400,000 to $700,000 range, making them affordable to middle-income families. But by 2023-24, the share had fallen to less than a quarter.
Over the same period, the proportion of $1 million homes has increased from 6 per cent of the market to 25 per cent.
KPMG urban economist Terry Rawnsley said a third of Australians – those on between $50,000 and $110,000 a year – earned too much to qualify for social housing, while property developers were increasingly targeting people on higher incomes.
“Without targeted intervention, this group faces chronic housing stress, reduced opportunities, and the long-term economic consequences will ripple through the entire economy,” he said.
KPMG is proposing a program connecting all levels of government to focus on providing homes to middle-income earners through a mix of targeted housing targets by region, concessional loans or government cashback payments to developers after they have completed projects and infrastructure provision.
Partly mirrored on the national competition payment system used by the Keating and Howard governments to lift productivity, KPMG believes a mix of financial incentives is needed to ensure developers build affordable homes for the bulk of the population.
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