Page 2474 - Week 08 - Thursday, 30 August 2007
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I may be one of 17 with this view, but the Chief Minister yesterday was quick to say, “Oh, Mr Mulcahy doesn’t believe in his task force on affordable housing, or whatever he is calling it, and his solutions.” I do not believe in it because I think the solutions are extremely complex. That is the view of most of the leading economists if you read their work on it—and I do. There are many factors, one not insignificant factor being taxation arrangements at the commonwealth level. Whilst this is a significant issue, I do not believe it is easily rectified without creating another new set of issues that have a consequence, as the Labor government found federally to their great shock and horror when they tried to upend the negative gearing arrangements many years ago. There is no question that it is an issue for a number in the community and we should be doing what we can at a territory level to assist, to the extent that it is possible within this administration, in reducing some of the pressure on housing affordability.
ACTPLA plays an important role in this area. It is responsible for the approval process for building projects that involve large amounts of investment and expenditure and usually run on tight schedules with little scope for delays. Crucial to all of this is the cost of finance which has to be met by somebody. I have not met too many property developers that are of such a magnanimous frame of mind that they are happy to absorb all of those things and not pass them into their cost structure.
Any problems occurring at ACTPLA, any delays, any bottlenecks in work, are not just an inconvenience to bureaucrats and to the clientele of this organisation. Delays and other problems in this area can lead to massive costs being imposed on developers and ultimately being passed on to the property market. To give an example, I was astounded when I was informed by a Canberra developer earlier this year that the approval process for removing one unwanted tree in an area for development ended up costing the developer in the order of $100,000 in delays, interest costs and additional legal work. This occurred prior to the current minister taking on the role. I will come back to that transition in a little while.
This may be an extreme occurrence, but it does highlight the enormous costs that can accrue from delays over what are essentially minor issues in the scheme of things. I have no doubt that this cost will ultimately be passed on to the relevant property buyers in that development or in future developments. My colleague Zed Seselja would be able to regale you with all sorts of similar horror stories where developers have had to sit back and wait for approval from ACT bureaucrats, while they watch their costs escalate at a rate that would make most people very anxious. Some may be tempted to ignore this problem. Some may decide that developers are big enough to look after themselves and that these delays only put a dent in their profits. But this, of course, is a mistaken view. The costs incurred in property development flow on to the costs of property in the ACT and contribute greatly to the problem of housing affordability for ordinary Canberrans.
I will concede that, apart from Mr Barr, it seems that a lot of people in this place do not understand that you cannot compartmentalise the events at one stage of the sale process in the marketplace and assume that they do not flow on to other areas of the entire cycle and ultimately cost. You cannot ignore what has happened at the top end and say, “That won’t hurt the people at the bottom end of the scale. We will make special arrangements for them and ignore the rest.” Things flow down, just as they do
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