Page 794 - Week 03 - Wednesday, 9 April 2014
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It is for that reason we want to do all we can to ensure that the conditions for the sector are conducive to investment, employment and productivity. There are many facets of the sector that are all needed to facilitate a well-functioning industry. The government charges need to be right, the regulations need to be reasonable, the planning rules need to be comprehensible, companies need to be trading fairly, sites need to be safe, land has to be available, unions and industrial relations conditions need to be productive and governments need to be helpful. If any of these components are not performing as they should, then problems will arise and all will suffer. If more than one of these conditions are substandard, then we run the risk of a more significant hit to the sector.
The construction sector is doing as well as it can, but it can do better if the government levers are better positioned. At present, I believe that the government is unreasonably charging too much in fees, fines, charges and taxes, and in doing so they are stifling investment and growth. Of course, a couple of specific examples of counter-intuitive charges are the lease variation charge and the extension of time fees. The government acknowledged that both of these fees were problematic, and recently announced some changes to them. However, I do not believe the changes go far enough. Indeed, there are concerns about the government’s announced changes in terms of what they actually mean.
The opposition has heard of some Canberra businesses copping fines of hundreds of thousands of dollars, and perhaps even in the form of millions of dollars. In the scheme of things, this is relatively small for the government, but these sums for any particular project are in fact deal breakers. Therefore, it means that the employment does not go ahead, the investment does not go ahead and the government does not even collect the fee. Rather than ad hoc responses to cut some of these fees, we need a strategic response that I hope a board of inquiry can help guide. Whilst there will always be special cases that need special consideration, we need to make sure we have a strategic response as well.
Another charge worth noting is the lease variation charge. The foreseeable outcome of this charge is in stark contradiction to the government’s stated objective of increasing density in and around the city and other major centres. The fee, which can sting developers up to $50,000 per annum, has put the brakes on many potential projects in the ACT. Whilst the ACT has been fortunate to have a few complexes underway, recently developed or about to commence many, if not all, were passed at the 75 per cent remission rate a couple of years ago, if not even before that—that is, before codification.
Just in today’s media we have Minister Corbell talking about how there is scope for 45,000 additional dwellings along the Northbourne and Gungahlin corridors. If the government continues with its lease variation charge, I think it is highly unlikely that any of those dwellings will get off the ground. I believe that the current planning regime is incomprehensible. We have a territory plan and associated documents which total thousands of pages. How can we reasonably expect a planner, architect, engineer, builder or tradesperson to be across such a document?
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